News in Brief
Steamships records an increase in sales revenue in 2019
12 March 2020
2019 was a difficult year for PNG after the euphoria of hosting the APEC summit in late in 2018. The economy remained weak in the absence of any progress on the much-needed investment in the resource sector and the uncertainty caused by the change of Government in May 2019 and the consequent significant readjustment of national debt further dampened sentiment. The National Budget presented in November 2019 projects 2020 will record the largest expenditure and budget deficit in PNG’s history. The ongoing shortage of foreign currency in PNG continues to suppress economic activity.
Continued budget support from multilateral agencies will be essential and likely to entail economic reforms that will impair economic activity in the short term. 2019 was a challenging year for the private sector as a whole and Steamships diverse business activities being closely integrated to the domestic economy were not immune to the negative impacts of the slowdown. Steamships’ sales revenue increased 4.3% to K585.1 million against last year’s K560.8 million, on a continuing basis with improved revenue for Consort offsetting declines for Pacific Palms Property and Coral Sea Hotels.
Depreciation in 2019 was K82.3 million against K83 million in 2018, and interest on borrowings (excluding capitalised interest) was K9.8 million against K10.3 million in 2018. Capital expenditure for the year was K93 million (with capitalised interest of K1.0 million) against K56.1 million (with capitalised interest of K1.7 million) in 2018.
The group’s net operating cash flow generation declined 9.7% to K105.4 million against K116.7 million in 2018. The cash balance at year end is K100.8m. A final dividend of 55 toea per share has been proposed and will be paid following approval at the company’s annual general meeting on the 17th of June 2020, subject to Steamships’ ability to secure foreign exchange for non PNG shareholders. This brings the total dividend for the year to 80 toea per share (2018 = 165 toea per share). The dividend is unfranked and there is no conduit foreign income.
Significant items
The gain on sale of properties is principally attributable to the sale of a plot of land in Port Moresby by the Company to an associated company, Harbourside Developments Ltd, being the site for the new mixed-use development Harbourside South.
Logistics
Consort Express Lines embarked on a significant turnaround programme in 2019 in the face of a highly competitive and depressed coastal liner and projects shipping market. This has started to show results with improved fleet and schedule reliability and customer service. New systems and management have been introduced and Consort’s results are improving. While investment in the resource sector remains weak, the focus is on the liner service with opportunities for projects and charter work, hopefully forthcoming later in 2020.
The Joint Venture Port Services businesses had a steady performance in 2019, recovering from the loss of the International Terminal Operator concessions in Port Moresby and Lae in 2018. JVPS now manages stevedoring and handling in 10 ports around PNG as well as an equipment hire business, providing a vital, safe and efficient operation for these communities, whilst providing an economic return to the local community shareholders.
East West Transport continues to grow its fleet and range of services in a steady profitable manner, winning some key new business in 2019 and maintaining a strong customer and fleet reliability focus. Pacific Towing experienced a modest year in its principal harbour towage work across ports in PNG from its main base at the Motukea port in Port Moresby. External towage work provided steady work in 2019 with tugs deployed throughout the region. Diving and life raft activity were steady. The company was engaged in a number of successful salvage and wreck removal operations in the region in 2019 and has established a strong reputation in this area.
Property & Hotels
Pacific Palms Property experienced a reduction in rental rates in 2019 in the face of increased competition and was unable to achieve the occupancy levels of the prior year and profit fell as a result. In response to growing competition, an upgrade programme was undertaken in Port Moresby and Lae to maintain its quality leadership position. Construction of the Harbourside second phase, Harbourside South, with residential, commercial and retail space, commenced mid-year and is on track for mid-2022 opening.
Coral Sea Hotels owns and manages nine properties in PNG and suffered from the increased capacity in Port Moresby coupled with the reduction in international arrivals. Nevertheless, CSH is committed to remain competitive through a sustained focus on investment in its quality service offering, food and beverage as well as the training and development of its staff.
Commercial
Colgate-Palmolive, (PNG) Limited a PNG incorporated joint venture, saw volume and sales revenue growth across all three categories of Oral Care, Personal Care and Home Care. Overall margin for the business was slightly lower than budget. Overheads were prudently managed to finish below prior year and in line with budget.
Trading Outlook
Whether the key resource projects proceed or not, 2020 is expected to be another challenging year for the PNG economy. We remain hopeful that resource projects will progress to binding agreements and subsequent significant investment that would be beneficial to the citizens of PNG and all the other stakeholders in the projects.
We remain firmly focused on the future and our commitment to the development of the country and people of PNG and the exciting opportunities that lie ahead.
Highlander Hotel opens its new conference facility
31 January 2020
Steamships division, The Coral Seas Hotels Group hosted the business community of Mount Hagen at a function on Thursday 30th January, to announce the opening of the city’s latest business venue, the brand new Highlander Hotel Conference Centre.
Able to accommodate up to 300 guests, the facility provides state of the art audio visual, call conferencing and technological capability, all complemented by superior catering and hospitality services. The modern, temperature controlled rooms and amenities are equipped to provide the ideal environment to discuss, transact, and share business ideas.
In his welcoming remarks, Rupert Bray, the Chief Operating Officer of Steamships Limited emphasized the company’s ongoing commitment to Mount Hagen, through its investment in the Highlander Hotel and other commercial ventures including Hagen Central.
“Mount Hagen is a very important PNG destination, for both economic and cultural reasons” remarked Mr. Bray. “It is the gateway to the food basket of PNG, the Highlands region, and a thriving economic hub that will facilitate and foster growth in the Agricultural, SME and tourism sectors. We’re delighted to bring a facility of this size to Mount Hagen, one that the whole community can share, and one that is capable of hosting both regional and national meetings and forums”.
The General Manager of the Highlander Hotel, Leo Berka, also welcomed the new addition to his hotel. “The hotel has recently undergone a facelift, with new improved rooms, and the new conference facility adds another dimension to what we can offer to visitors to Mount Hagen. The staff and I are looking forward to welcoming guests and providing them with a first class hotel experience”.
Steamships celebrates its Family Fun Day in Lae
02 December 2019
The Steamships Family Fun Day in Lae brought together the whole STC Lae community on Saturday 30 November at the Scrum Oval. The fun filled day had over 1,200 people including employees and their families from Pacific Palms Property, Coral Sea Hotels, JV Ports, Consort, East West Transport and Swire. The annual event had something for everyone, including bouncy castles, fun treats which included ice cream and candy floss, music, games and a BBQ.
On hand to help out on the day were Steamships Managing Director Michael Scantlebury and Chief Operating Officer Rupert Bray, who received good support from the General Managers of Consort and East West, along with senior staff members.
“We consider the Lae family fun day program to be an important event on our calendar. It’s just reward for our hard working employees on this side of the country, and provides a great opportunity for fun interaction between management, staff, and their families”, remarked Michael Scantlebury.
The planning committee had been working on the event and programme for the past two months according to Alythea Siraba from STC Corporate, who thanked the 10 volunteers from the Lae based companies for their assistance and contribution to a very enjoyable day.
The event was coordinated by The Right Connections, with supporting contributions from Colgate-Palmolive PNG Ltd, Ramu Agri, Theodist, Paradise Foods, Coca Cola Amital, and Guard Dog Security.
Highlander Hotel is gearing up for the opening of the new conference facility.
13 November 2019
Highlander Hotel is gearing up for the opening of the new conference facility.
At a cocktail party on the eve of the Steamships Board meeting in Mt Hagen the Chairman took the opportunity to
introduce the soon to be opened Highlander Hotel conference facility.
“We are excited to continue our plans into 2020 with the opening of this refreshed conference facility featuring
upscale amenities, modern designs and a dedicated staff,” remarked Geoff Cundle.
On hand to witness the soft opening was Sir Peter Ipatas, Steamships Board of Directors, Coral Sea Hotels
Management, Mt. Hagen business community as well as various community leaders.
The new facility offers meeting rooms for up to 300 guests with flexible solutions for various meeting and banquet
requirements. The facility will offer AV capabilities with LCD projectors and screens combined with superior high
quality image clarity. Functional seminars, birthdays, corporate dinners and wedding receptions can take place at the
conference rooms.
The conference centre is expected to open in phases starting 12 November 2019. “We are looking forward to
continuing our partnership with our guests and opening the doors to the new facility. Our excellent location is a
gateway to all businesses in the region and Highlander Hotel offers guests a variety of services including outdoor
pool, relaxing guest rooms, restaurants and meeting rooms”, said Peter Laigaard Jensen, Group General Manager of
Coral Sea Hotels.
The new facility exemplifies Steamships commitment to investment and partnership in the region and Coral Sea Hotels
are equally committed to building a meaningful and memorable experience for guests who chose to stay.