How Is Steamships Navigating Growth Amid ERP Costs and Property Gains?
Steamships Trading Company Limited reported a modest 1.7% dip in half-year profit despite a 6.7% rise in revenue, driven by strong divisional performances and significant property gains. The company’s increased capital investment and cautious outlook highlight ongoing challenges and opportunities in Papua New Guinea’s economic landscape.
- Profit after tax down 1.7% to K24.8 million
- Revenue up 6.7% to K361.6 million
- K9.5 million ERP system upgrade expense
- K16.4 million net gain on property disposals
- Proposed interim dividend of 40 toea per share
Steady Revenue Growth Despite Profit Dip
Steamships Trading Company Limited has released its half-year results for the period ending 30 June 2025, revealing a nuanced financial picture. While the company’s profit after tax slipped slightly by 1.7% to K24.8 million, revenue climbed 6.7% to K361.6 million, reflecting robust operational performance across its diverse business segments despite a soft economic backdrop in Papua New Guinea.
Impact of Significant One-Off Items
The modest decline in net profit masks underlying strength, as the company absorbed a K9.5 million expense related to an ongoing enterprise resource planning (ERP) system upgrade. This investment in technology modernization is expected to enhance operational efficiency in the long term. Additionally, Steamships recorded a K16.4 million net gain from property disposals, which bolstered the bottom line but also underscores the transitional nature of some asset holdings.
Capital Investment and Cash Flow Improvements
Capital expenditure nearly doubled to K130.5 million, signaling Steamships’ commitment to growth and asset renewal. This includes ongoing renovations at Coral Sea Hotels and the development of the Dobel Shopping Centre, a premium mixed-use mall slated to open its first phase in early 2026. The group’s net operating cash flow improved to K69.3 million, up from K53.4 million in the prior period, providing a stronger liquidity position with cash and bank balances rising to K37.9 million.
Segment Performance and Strategic Outlook
All divisions; property, hospitality, and logistics; performed ahead of expectations. Coral Sea Hotels navigated a challenging market with lower room rates but offset costs effectively. Pacific Palm’s Properties saw revenue uplift from luxury residential offerings reopening, while logistics benefited from recent fleet investments. The joint venture with Colgate-Palmolive (PNG) Limited remained steady despite foreign exchange pressures. Looking ahead, Steamships remains cautiously optimistic, mindful of ongoing macroeconomic headwinds, foreign currency access issues, and delays in natural resource projects that temper growth prospects.
Dividend and Governance
The board has proposed an interim dividend of 40 toea per share, subject to approval, reflecting confidence in the company’s cash flow and earnings stability. The governance team, led by Chairman G.L. Cundle and Managing Director C.K. Daniells, continues to steer the company through a complex operating environment with a focus on sustainable growth and shareholder returns.
Bottom Line?
Steamships’ blend of steady revenue growth, strategic investments, and cautious optimism sets the stage for a pivotal second half amid PNG’s economic uncertainties.
Questions in the middle?
- How will the ERP system upgrade impact operational efficiency and costs going forward?
- What are the potential financial implications of the ongoing PNG Customs import duty dispute for the Colgate-Palmolive joint venture?
- Will the board approve the proposed interim dividend, and how might this influence investor sentiment?
