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.