PBT up 32.8% but NPAT +79.7% flattered by tax-rate reset

PBT grew 32.8% to NZ$17.8m, also above the historical range. Reported NPAT of NZ$13.3m was up 79.7%, but that headline is amplified by the effective tax rate falling from 45.1% to 25.1%; PBT is the cleaner read on operating performance.

Operating cash flow lifted 85.1% to NZ$23.7m, helped by an operating working-capital release of NZ$9.4m. The supplied historical baseline shows releases averaging NZ$4.4m across the last three years (range NZ$0.5m–NZ$6.5m), so the current movement is below normal range and roughly NZ$5.0m above the typical release.

Net debt fell to NZ$24.9m from NZ$33.4m, taking net debt/EBITDA to 0.97x from 1.57x. The full-year dividend was 28.0cps versus 27.0cps prior, with the final component at 20.5cps.

The prior 45.1% effective tax rate sat well above the historical mean of 27.1%; this year's 25.1% sits at the lower edge of the range. That swing alone accounts for the bulk of the PBT-to-NPAT growth gap of 46.9 percentage points, so investors should anchor on PBT +32.8% as the underlying earnings signal.

Cash conversion looks strong, but with help. OCF/EBITDA jumped to 91.6% from 60.0%, and FCF pre-lease of NZ$16.9m exceeded NPAT (FCF/NPAT 126.9%). The NZ$9.4m working-capital release is the single largest swing factor; on a normalised release closer to the NZ$4.4m historical mean, OCF would have been materially lower. Receivable days rose to 51.3 from 45.4 — above the supplied historical range — which sits oddly with the headline working-capital benefit and points to a payables/contract-liability timing contribution rather than improved collections.

Cargo mix carried the result despite Tiwai weakness. Bulk volumes rose 12.5% to 3.0Mt and container revenue per TEU rose 29%, more than offsetting a 20% decline in Tiwai volumes to 811kt. With NZAS returning to full production by April 2025, the FY25 Tiwai drag is set against partial-year disruption commentary rather than a structural shift.

The interim-context split shows HY25 contributed 46.7% of full-year revenue and 43.2% of full-year NPAT, so the FY25 result was second-half weighted on both revenue and earnings — consistent with bulk cargo seasonality and the partial Tiwai recovery.

The release frames the 28.0cps full-year dividend as positioning for "future infrastructure investment", which alongside lower capex of NZ$8.0m (12.7% of revenue, down from 18.3%) suggests the company is preparing for a step-up in spend rather than rebasing distributions downward. Capex intensity normalising back up is the key watch item.

PBT growth of 32.8% reflects real margin expansion (EBITDA NZ$25.8m, +21.2%), while the NPAT +79.7% headline is mechanically lifted by the tax rate moving from a high prior base back into the company's normal corridor. Investors should not extrapolate the 79.7% rate of change.

On cash, the durable component is the EBITDA lift and lower capex; the timing component is the NZ$9.4m working-capital release, which the supplied historical pattern suggests will be hard to repeat. With receivable days now above the historical baseline of 14.8 days, working capital looks more likely to consume cash than release it in FY26. ROE of 20.0% sits at the lower edge of the company's historical range despite the NPAT step-up, because total assets and equity have grown faster than earnings, capping incremental returns on the larger base.

This briefing cannot assess management's specific infrastructure investment pipeline or the contractual basis for the new NZ$2.4m contract liabilities balance.