During last month’s Port of Newport commission meeting Todd Kimball, who has been hired to help the Port of Newport with their Finances presented port commissioners with a financial review. Below are excerpts from the report.
Oregon & Washington Ports – Financial comparison Compared PON to 12 Oregon Ports and 3 Washington Ports (2016) Reviewed 5 years of PON financial results from 2012-2016, with isolated reviews dating to 2004. Most comparison Ports are smaller, while 3 are larger or of similar size. All analysis is viewed as a percentage of revenue (relative size).
Oregon & Washington Ports – Financial comparison. All but 1 of the 16 Ports had Net Operating Losses. Of the 15 Ports with losses, PON had the smallest loss (as % of Revenue) The Port has had Operating Income in 3 of the 5 last years, with a 5- year total of $435K positive income. However, PON was the only Port with a non-operating loss: – Generally Property Tax Revenues + Grant Revenue > Interest Expense – PON: Interest Expense exceeds Property Tax + Grant Revenue by $797,000. – There have been non-operating losses in 4 of the last 5 years.
PON spends the least amount on personnel services (as a % of revenue). – 21% of PON Revenues expended on Personnel – 44.9% average for other Ports PON’s interest expense is over 4 times the average Port reviewed. Property tax revenue is on par with the average Port reviewed. Grant income is significantly below the average Port. – In the past 5 years, the highest amount of grant income was $1.25m, and even this amount is below average. – The PON 5-year average grant income is approximately 7 times lower than comparison Ports.
Current Assets (cash, A/R, etc) are on par with other Ports. Capital Assets are much higher than comparative Ports and conversely long-term debt is also much higher. (more on this next) Days of cash on hand: – PON = 486 days, vs. Port Average = 280 days Current ratio (current assets vs. current liabilities) – PON = 3.46, vs. Port Average = 2.16. Port of Newport is highly leveraged. The Port’s Debt to Assets ratio is nearly 2.5 times that of average Ports. 18.3% for Ports analyzed vs. 45.1% for PON. Interest expense for average Ports is 7.5% of revenues. PON pays 31.7% of revenue towards Interest. Over 4 times. PON has leveraged its assets and committed itself to be productive with those assets. Margin for error is thin, and risks are higher during an economic downturn. Cost reduction options are limited.
Kimball’s full report can be found on the Port of Newport website in the meeting packet