Lyttelton Port hit by quakes, Solid Energy

Listed Lyttelton Port Company directors continue to suspend dividends until the company finalises its insurance and funding.

“We know that this situation is not ideal, and the patience of shareholders is very much appreciated,” chairman Rodger Fisher told the annual meeting today.

The result for the first quarter of the current financial year reveals an earthquake-adjusted net profit after tax of $3.5 million, $0.6 million below last year’s first quarter result.

Total revenue for the quarter is 3% higher than the previous year.

Container volumes are consistent, and other cargoes and bulk fuels have grown 14% and 17%, respectively.

The forecast for the full financial year is an earthquake-adjusted result of between $13 million to $15 million.

The reduction from the June 2012 full-year result of $17 million is largely through the company moving outside its indemnity period for cruise revenue and falling coal volumes from Solid Energy.

The earthquakes cost $52 million in material and business interruption loss.

Insurers have made progress payments of $35.7 million and port executives are negotiating with insurers on the adjustment of a $10 million claim of losses and costs that was lodged in late August 2012.

Insurers have confirmed reinstatement insurance for some assets. They have also agreed a number of the key harbour structures have been so extensively damaged that they will need to be replaced.

The company has increased its limited insurance cover to include business interruption.

Buildings and plant are insured, but earthquake damaged assets (more than 50%) and infrastructure assets remain uninsured. All cover excludes damage from natural disasters, including earthquakes.

Mr Fisher says the company is committed to the reinstating its assets as quickly as practically possible but says the full reinstatement of key harbour structures will take years to complete.

“We expect to maintain all of our major trades and meet their growth expectations as we rebuild our key infrastructure.”