Friday 1st July 2011
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Australian waste management company Transpacific Industries has written down the goodwill of its New Zealand division by between about $A180-200 million ($NZ233-259m) on lower expectations for the rate of growth in this country.
The impairment makes up the bulk of an expected total non-cash write-down announced today by the company on the carrying value of intangible assets of $A225-250m.
Transpacific took over company Waste Management in this country in 2006 in a deal worth $870m.
Today Transpacific said the write-down in New Zealand arose solely from the need to apply a more conservative future growth rate to the NZ division given the difficulties facing the economy, both generally and as a consequence of recent natural disasters.
Despite that, Transpacific also said the Christchurch earthquakes and one off projects had added about 2.5 percent to revenue for the 2011 financial year.
Involvement in the Christchurch recovery could see New Zealand revenue growth for 2012 exceed the rule of thumb "GDP (gross domestic product) + CPI (consumer price index)" formula, Transpacific said.
The NZ division write-down did not reflect the company's business performance in this country which continued to be strong.
NZ division profit growth in New Zealand dollar terms in 2011 was "robust", underpinned by greater specialist waste treatment work orders, a focus on internal process efficiency, and ongoing support to quake recovery activities.
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