Tower still profitable despite earthquake expense
Tower says a lower net profit at $33.4 million is “satisfactory” in a year the country suffered major earthquakes.
The listed insurer and financial services group lost $23.6 million as a result of the earthquakes in Christchurch this year.
Stripping out that amount, and a $2.4 million gain from better discount rates under new accounting standards, a profit of $54.6 million was achieved -- $3.7 million or 6% lower than the year to September last year.
The biggest proportion of that, at $21.2 million, was earned within the life insurance division.
Group managing director Rob Flannagan said the Christchurch earthquakes and the global financial crisis created a difficult operating environment during the year.
Earthquake-related claims of more than $450 million were being processed by the insurer and were to be met during the normal course of business.
Tower, 35% owned by Guinness Peat Group, will pay a final dividend of 2 cents per share on February 1, bringing the payout for the full-year to 6 cents.
Shares in Tower are trading down 4c or 2.7% at $1.43.
Subsidiary Tower Capital made a net profit of $404,000, down 6.5% for the year, on revenue of $8.2 million.