Tower profit cut in half by earthquakes
Tower's net profit has fallen 54% after the Christchurch earthquakes and changes in the discount rate for policies.
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Tower (NZX:TWR) has taken a hit after the Christchurch earthquakes, with its half-year profit falling 54% to $12.8 million.The profit slump is the result of the earthquakes and a loss due to changes in the global investment market.
Excluding these items, the company said its after tax profit for the six months to March 31 were $26.2m, compared to $27.7m a year earlier.
A loss of $7.5m was attributed to the earthquakes, while a loss of $5.7m was a result of changes in the global investment market, which in turn affected the discount rate applied under accounting standards in valuing individual life risk policy liabilities.
Half year revenue fell 10.2% from a year earlier to $259.4m.
Group managing director Rob Flannagan said Tower had provided for more than $350m in claims for the two major Christchurch earthquakes.
Despite this, Tower will pay an unchanged interim dividend of 4c a share.
Tower chairman Tony Gibbs said the impact of the earthquakes aside, the company performed well across its three businesses, while changing the business model to focus on improving and strengthening its customer service.
NBR staff
Fri, 27 May 2011
Fri, 27 May 2011
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Tower profit cut in half by earthquakes
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