Insurance payout lifts port profit
Lyttelton Port of Christchurch is to revitalise its quake rebuild programme after receiving hundreds of millions of dollars of earthquake insurance.
The NZX-listed port yesterday posted a $336.5 million half-year profit boosted by a massive one-off insurance payment in final settlement of its earthquake claims. This compared to a $3.3m net profit in the six months to December 31, 2012.
Chief executive Peter Davie said two-thirds of the remaining $382.7m plus GST insurance payout to LPC was in the bank yesterday. The port was expecting the remaining third to be paid last night.
LPC shares yesterday closed 24 cents lower at $3.30 following the release of the result but on very light volume, with a broker saying nothing could be read into the move in the illiquid stock.
LPC announced the huge insurance settlement of $450m inclusive of GST ($438m exclusive of GST) in December, with some already paid.
Taking into account earthquake adjustments the profit would have been $6.5m for the six months to December 31, 2013, 18 per cent lower than the previous first half's $7.95m.
Davie said the port had ramped up repairs and pushed the green light on another $10m of spending. It has already committed the insurance proceeds to the development of port facilities, including one of its main wharves.
"We've really got into some of the work we've done behind [the damaged] Cashin Quay. As of Monday there will be demolition work starting on that."
The LPC management team would present a redevelopment plan for the port to a mid-April board meeting. Decisions could be made then on projects such as a cruise ship terminal and the future of the badly damaged old Norwich Quay LPC administration building, which could be repaired and sold.
The management team, now based in Chapmans Rd, Woolston, would possibly eventually relocate to a new "operational centre-headquarters" facility near the Lyttelton container operation.
The company would be resuming dividends after suspending them following the first big earthquake in Canterbury on September 4, 2010. It declared a 2c a share dividend for the half year.
The Christchurch City Council's investment arm, Christchurch City Holdings (CCHL), which owns almost 80 per cent of the company, will receive about $1.64m in dividends. Port Otago owns 15.48 per cent of LPC.
The port had increased land for containers by 20 per cent and would extend that by another 20 per cent by the end of April.
It was finalising contract works insurance cover for the work programme and expected all its assets would be able to be insured again.
Davie said the port expected an earthquake-adjusted profit of between $15m-$16m in the year to June.