Port lifts profit despite insurance problems

04:41, Apr 10 2013

Lyttelton Port of Christchurch continues to be hampered by insurance issues but says it has continued a strong trading performance with an improved first- half net profit of $3.25 million.

The bottom line was up from a $2.8m net profit reported in the half year to December 31, 2011. It was backed by a 4.5 per cent improvement in first-half revenues, up to $54.2m for the December 2012 period under review.

Chief executive Peter Davie said highlights for the year to date included continued growth in the container trade and an increase in general cargo volumes across some trades.

The port company did not declare a dividend. Dividends were put on hold in March 2011, because of the earthquakes of 2010 to 2011 which caused an estimated $500m of damage at the port.

The port, 79.53 per cent owned by Christchurch City Holdings, the investment arm of the Christchurch City Council, has been formulating a draft-repair plan for more than 500 quake-damaged assets.

But the plan does depend on further insurance payments. The amount paid out so far remains stalled at $35.7m, with the last payment in May 2011.


In a statement, LPC chairman Rodger Fisher said the dividend situation remained the same.

"Matters with our insurers are not yet finalised and the total financial impact of the earthquake damage remains unclear," Fisher said. "The payment of dividends therefore remains suspended, although we see no reason why we would not revert back to paying dividends once matters have been resolved."

In recent months, LPC had continued to work constructively with the insurers on its claims and good progress was now being made in all areas - material damage, business interruption and contract works.

Reinstatement designs for the key harbour structures were under way, with construction planned to start during 2013. LPC would start public consultation on the wider building programme this year.

LPC's quake-damaged head office building at Norwich Quay was still a focus. Final engineering reports were expected shortly and would point to a repair or rebuild followed by discussions with insurers.

The company yesterday also reported a quake-adjusted profit after taxation of $7.95m. Last year that adjusted profit level was $9.53m.

Davie said trade volumes were expected to continue to grow in the second half of the 2012-13 financial year.

LPC's current expectation for the full-year quake-adjusted profit after tax was between $13m and $15m.

The Press