Steamships Reports 14.3% Revenue Rise and 12.2% Profit Decline in H1 2026

Revenue Growth Masks Profit Pressure

Steamships Trading Company Limited (ASX:SST) reported a 14.3% jump in revenue to K413.4 million for the half-year ended 30 June 2026, yet net profit attributable to shareholders declined 12.2% to K21.8 million. The profit drop reflects substantial costs tied to the ongoing upgrade of its enterprise resource planning (ERP) system, which accounted for a K6.8 million cash spend during the period.

Adjusting for these ERP expenses, insurance proceeds, and gains on property disposals, Steamships’ underlying profit attributable to shareholders actually rose 27.2% to K25.5 million, indicating solid operational momentum across its diversified portfolio.

Capital Investment and Cash Flow Strengthen

The group ramped up capital expenditure to K164 million, up from K130.5 million in the prior corresponding period, funding property developments, tugs, and vessels. This investment aligns with ongoing refurbishment programs, notably within the Hospitality division’s Port Moresby properties, which are undergoing extensive upgrades expected to complete within 12 months.

Cash flow from operations improved significantly, generating K115.8 million compared to K69.3 million a year earlier. Despite this, Steamships ended the period with K28 million in cash and bank balances, down from K37.9 million at the same time last year, reflecting the heavy capital outlays.

Divisional Performance Meets Expectations

All divisions delivered results consistent with management’s guidance. The Property division maintained healthy demand across commercial and residential assets, with the first phase of the Dobel Shopping Centre slated to open next quarter and Phase 2 due in 2027. The Logistics division posted growth supported by increased freight volumes and improved reliability in its Marine business.

The group’s joint venture, Colgate-Palmolive (PNG) Limited, continued steady performance despite foreign exchange pressures squeezing margins. Steamships holds a 51% interest in this associate, which is currently disputing a K11.1 million customs duty reassessment that could impact future profits.

Dividend and Outlook

Steamships proposed an interim dividend of 35 toea per share, subject to board approval, down from the 65 toea final dividend declared for 2025. Earnings per share fell to 70.3 toea from 80.1 toea in the prior period.

The company remains cautiously optimistic about the second half of 2026, buoyed by its ongoing investments in product upgrades and service improvements, alongside a strengthening business sentiment linked to increased activity in the resource sector.