Steamships Trading Company Limited reported a robust 46% rise in net profit for 2025, driven by strategic investments and operational improvements, while proposing a higher dividend despite ongoing ERP upgrade expenses.
- Net profit attributable to shareholders up 46.3% to K67.1 million
- Revenues increased 11.3% to K798.2 million
- Underlying profit more than doubled after adjusting for ERP costs and property gains
- Proposed final dividend raised to 65 toea per share, total K1.05 per share for 2025
- Positive but cautious outlook with focus on balance sheet strength and capital discipline
Strong Financial Performance Despite Economic Headwinds
Steamships Trading Company Limited has delivered a notably stronger financial result for the year ended 31 December 2025, with net profit attributable to shareholders climbing 46.3% to K67.1 million. This growth comes despite a lack of significant economic stimulus from resource sector projects during the period, underscoring the resilience of the Group’s diversified operations.
Revenue rose 11.3% to K798.2 million, reflecting steady demand across the Group’s core divisions. The company’s strategic investments in assets, technology, and human capital over recent years have evidently paid off, enhancing operational capabilities and positioning Steamships for sustained performance improvements.
Impact of ERP Upgrade and Property Gains
Underlying profit, which strips out significant one-off items, more than doubled to K65.3 million. This adjustment accounts for a K25.3 million cash outlay related to the ongoing upgrade of the Group’s enterprise resource planning (ERP) system, a major technology initiative aimed at modernising internal processes. Additionally, a K19.7 million net gain on property disposals contributed positively to earnings, alongside K2.9 million from insurance proceeds.
While the ERP investment represents a sizeable expense this year, it is a strategic move expected to yield operational efficiencies and cost savings in the medium term. The balance between these upfront costs and future benefits will be a key focus for investors monitoring Steamships’ earnings trajectory.
Divisional Performance and Capital Management
All major divisions; Hospitality, Property, Logistics, and Commercial; performed in line with expectations. The Hospitality segment undertook significant refurbishments across key Port Moresby hotels to maintain asset quality and competitiveness. Property division projects such as Portside Business Park and Downtown Plaza continue to advance, supporting future growth prospects. Logistics benefited from favourable commodity pricing, while the Commercial division, including the Colgate-Palmolive joint venture, delivered steady revenue and profit growth despite foreign exchange challenges.
Capital expenditure was slightly reduced to K201.6 million from the previous year’s K231.1 million, reflecting disciplined spending. The Group’s net operating cash flow increased 12.6% to K176.3 million, supporting a healthy cash balance of K37.7 million at year-end. Borrowing facilities were increased from K605 million to K800 million and extended post-year-end, enhancing financial flexibility.
Dividend and Outlook
Steamships has proposed a final unfranked dividend of 65 toea per share, subject to Board approval and foreign exchange availability for non-PNG shareholders. Combined with the interim dividend, total dividends for 2025 amount to K1.05 per share, up from 70 toea per share in 2024. The unfranked nature of dividends and the absence of conduit foreign income reflect the Group’s current tax position.
Looking ahead, the Group maintains a positive but measured outlook. While it remains alert to opportunities linked to natural resources projects, capital allocation will remain prudent, with a clear emphasis on balance sheet strength and operational efficiency. This cautious stance is prudent given ongoing economic uncertainties and the sizeable ERP investment underway.
Regulatory and Contingent Risks
Investors should note an ongoing customs duty appeal involving the Colgate-Palmolive (PNG) joint venture, which could impact future profits depending on the outcome. The Group has disclosed contingent liabilities related to this matter but does not anticipate losses at this stage. Monitoring this regulatory risk will be important for assessing potential earnings volatility.
Bottom Line?
Steamships’ strong profit growth and disciplined capital approach set the stage for cautious optimism, but ERP costs and regulatory risks warrant close attention.
Questions in the middle?
- How will ongoing ERP system costs affect Steamships’ profitability in coming years?
- What is the likely outcome and financial impact of the customs duty appeal involving the Colgate-Palmolive joint venture?
- Will Steamships maintain or increase its dividend payout amid capital expenditure and forex constraints?