Thursday 3rd November 2011
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Lyttelton Port of Christchurch's lead insurer is disputing the port's latest insurance claim from the earthquakes that devastated the city, and the port will welcome just three cruise ships this summer, down from 64 last year.
Yet the port was able to tell shareholders at their annual meeting that it had a record quarter in the three months to September. It is forecasting a trading profit of between $13 million and $15 million for the full-year after notching up $4.1 million of that in the first three months.
The port has received progress payments of $35.7 million for both business interruption and material damage expenditure as a result of the magnitude 6.3 earthquake that struck on February 22.
A further progress claim of $11 million was made in August, which has grown to $20 million with additional expenditure over the past few months.
"Late yesterday we were formally advised by our lead insurer that at this stage they are disputing the progress claim," chairman Rodger Fisher said. "We are taking this issue very seriously and we will be taking all necessary legal advice."
The dispute related to the level of insurance for reinstatement of assets.
"It is our view, having reconfirmed overnight our legal advice, that LPC’s assets are covered for reinstatement. Significant resources have been and will continue to be committed to resolving these insurance issues," he said.
The shares haven’t yet traded today and were last at $2. The stock has declined 11 percent this year.
Shareholders re-elected Brian Wood as a director and elected Karl Smith as a director.
They were told that the port handled 75,344 twenty foot equivalent containers in the first quarter, up 14.1 percent on the same quarter last year.
October volumes were a record.
"New shipping services are contributing significantly to this container growth," Fisher said.
While coal volumes were on a par with the same time last year, log exports rose a significant 32.4 percent to more than 85,000 tonnes. The port expects log volumes to ease as exports to China come off their high.
Shareholders authorised an increase in the total amount of director’s fees payable by $9,000 to $304,000 per annum effective from Nov. 1.
The reduction in cruise ship visits will reduce annual gross revenues by $3 million, less associated costs, and this is included in the port's insurance claim. The port is majority owned by the commercial arm of Christchurch City Council.
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