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Lyttelton Port waives dividend as Vero disputes claims

Listed Lyttelton Port Company has suspended its dividend after Vero refused to pay out for earthquake damage.

The refusal of Vero to pay the progress money means that the port may have to stop repair work on damaged buildings and wharves in a couple of months.

The hard ball attitude of Vero mirrors what is happening throughout Canterbury as insurers pull back and dispute claims.

One homeowner told NBR yesterday that he had accepted nearly $100,000 less than he might have been entitled to because he just wanted to move on.

At the annual meeting in November last year the chairman Rodger Fisher revealed that Vero was disputing an $11 million progress claim made in August 2011, which had grown to $20 million with additional repair expenditure over the following months.

“A total of $35.7 million has been received in relation to the insurance claims to date. Total losses and costs committed to December 31, 2011 are in excess of $50 million and it is important that this negative cash flow position is resolved.

Discussions are ongoing with Vero and other insurers.

“However, our difference of opinion with insurers as to the extent to which our assets are insured for reinstatement as well as the extent to which repairs are temporary or permanent remain unresolved.

“We have committed significant resources to these matters and we remain confident that the cashflows will be restored as these issues are resolved,” Mr Fisher said.

In spite of he difficulties the port delivered a 55.5% increase in its earthquake-adjusted trading result for the six months to 31 December 2011 compared to the same period in 2010.

The company posted an earthquake-adjusted profit after tax of $9.5 million. This compares to a $6.1 million earthquake-adjusted profit for the same period.

Pre-adjusted, the profit for the period was $2.8 million but the addition of loss-of-earthquake-revenue of $1.4 million and earthquake-related expenditure of $7.9 million, minus tax of $2.6 million took the bottom result to $9.5 million.
 

More by Chris Hutching

Comments and questions
6

Join the club , Lyttleton Port, of those insured who mis-understand the meaning of re-instatement insurance. It is not to be confused with replacement insurance. Most commercial premises in NZ use(d) re-instatement insurance, but no longer.

Isn't it always the same, small claims get paid, big one don't. Often the insured will be told after an insured event occurs " we think you're not liable, so there is no reason to pay". But of course the insurer knows that the insured's cash flow will sink the company, plus any claims that they might have had to pay to the insured had th insured survived the insured event......

Always known insurance is a scumbag industry and all the glossy ads we pay for through premiums do nought to change we unfortunates caught up in the claim merry go round.
Insurance has 2x profit opportunities, first from the premium paid, 2nd when they refuse a payout.

It's a pity you don't know the facts on this claim before using a term like scumbags. Of course it is easier to throw stones without the burden of information or knowledge.

Gross generalisations ahoy!

Perhaps after the lawyers involved have argued about what a word means and examined decided court cases as well as having provided many legal opinions at great cost of time to the two warring parties; the mere owners (i.e. the CHCH ratepayers and other private shareholders might actually get their dividend reinstated. Don't hold your breath people.