Steamships Businesses Achieve Growth In Spite Of Challenges

by PNG Business News - May 09, 2022

Photo credit: JMP Securities

According to the company's 2021 annual report, Steamships' businesses were robust in achieving an overall revenue increase of 11% in 2021.

Chairman Geoff Cundle stated that the outcome was achieved despite the twin obstacles of a weak underlying local economy and the global consequences of the Coronavirus (Covid-19).

“Steamships’ hospitality group, Coral Sea Hotels, was deeply impacted by border closures and restrictions on domestic travel in 2020 but, after a slow start, it benefited from the demand for quarantine rooms in 2021,” Cundle said.

“Conversely, property occupancy and rental rates remained depressed throughout the year, and this will continue for several years as, without meaningful growth in the economy, there will remain an over-supply of units throughout much of Papua New Guinea.

“Our logistics businesses have adjusted effectively to the operational constraints caused by the pandemic and are responding to early signs of recovery inactivity. In summary, after a disappointing 2020, and notwithstanding the lingering negative impacts of Covid-19, 2021 saw an improvement in the group’s performance,” he said.

“It has been two years since the outbreak of the global Covid-19 pandemic and unfortunately the impact of the virus continues to be felt across all economies.

“Businesses have suffered from travel restrictions and a general reduction in demand for goods and services.

“Steamships has been no exception but has adapted well and I am pleased with the robust performance that has been achieved under difficult circumstances.”

Meanwhile, Cundle said Steamships continued to welcome the Government’s attempts to broaden the base of the economy and rebalance the allocation of benefits from resource projects.

“This is an important long-term strategic goal that should promote broader and sustainable economic growth and employment.

“We are encouraged by the progress in new resource projects with PNG-LNG moving forward and P’nyang under negotiation.

“Disappointingly, it appears that Wafi-Golpu and Pasca-A exhibit little immediate prospect for progress.

“Porgera mine in Enga remains closed. It is hoped that progress on all these projects, together with other initiatives, notably investment in improved infrastructure, will stimulate the economy in 2023 and beyond.

“Traditionally an election year boosts economic activity but in 2022 the increasing national budget deficit could constrain this stimulatory effect.”


Reference: The National (3 May 2022). “Steamships businesses report 11pc growth despite challenges”.

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Steamships Trading Company Ltd, based in Port Moresby, has declared an improved financial performance for 2021. “On the back of a strong performance in the hospitality division and a continued recovery in the shipping division, revenue increased 11 per cent to K564 million on a continuing basis and the underlying profit attributable to shareholders rose 14.8 per cent to K90.6 million,” Steamships said in a statement. “The company declared a final dividend of 1 kina per share, up 25 per cent from the prior year.” The company further said 2021 was a difficult year for the PNG private sector as a whole and Steamships’ diverse business activities, being closely integrated to the domestic economy, were impacted by the negative impacts of the COVID-19 virus and an economic slowdown. “However, prudent cost management, a dedication to customer service and cautious investment have delivered much improved results in 2021 over the prior year.” Chairman Geoff Cundle said: “This is a pleasing result for our 600,000-plus Papua New Guinean shareholders and beneficiaries, coming as it does on the back of a decade of challenges for the company. “We’ve been through some lean years that have coincided with an economic lull in PNG, and more recently we have had to adjust to the devastating impacts of a global pandemic.” Cundle highlighted that the improved results reflect hard work, making tough but timely business decisions, and a resilient and loyal workforce. “We’ve adjusted our balance sheet over time, rightsized our businesses, introduced efficiencies and made a significant investment in our business infrastructure that will accrue long-term benefits. Some of that benefit has flowed through to the numbers this year,” he stated. Steamships operate multiple divisions across the country, including Pacific Palms Property, Coral Sea Hotels, East West Transport, Pacific Towing, Consort Express Lines and Joint Venture Port Services, employing around 3,000 Papua New Guineans. The company is confident in the prospects for the PNG economy and has several exciting investments in the process. “The K500 million Harbourside precinct will be completed this year with the delivery of Harbourside South; the first portion of which will be handed over by the builders to Pacific Palms Property in March,” outlined Steamships. “In addition, two mixed-used developments, one in Mount Hagen and one in Port Moresby, will commence later in the year. “The company will remain vigilant in managing costs while being responsive to opportunities created by challenging market conditions. “Later in the year, Steamships will move its corporate office and those of Pacific Palms Property and Coral Sea Hotels into @345 on Champion Parade, the old Burns House. This move signals Steamships’ desire to play a central part in regenerating downtown Port Moresby.”   Reference: Loop (1 March 2022). “Steamships Posts K90.6m Profit”.

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