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Wellington's CentrePort posts $35.7 million 1H loss after Kaikoura earthquake

Wednesday 1st March 2017

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CentrePort, the Wellington port operator, reported a loss in the first half of its financial year due to damage from November's Kaikoura earthquake, which it described as the biggest adverse event in its history.

The port company turned to a loss of $35.7 million in the six months ended Dec. 31, from a profit of $4.6 million in the year-earlier period, it said in a statement. The company said revenue had been tracking "strongly ahead" of the year earlier prior to the earthquake but ended the period 3.2 percent lower at $34.4 million.

The latest result includes $68.7 million of asset impairments, excluding land, due to the earthquake, and a $20.4 million hit to value of its property. The value of its equity at Dec. 31 fell to $126.7 million, from $213.1 million at June 30 as the value of port land was written down by $50 million. The company said it had received $54.2 million in insurance proceeds to date, and expected additional funds in the second half of the year to bolster its annual result.

CentrePort was forced to suspend operations immediately following the Nov. 14 Kaikoura earthquake as it dealt with damage to its buildings and liquefaction. Since then it has been able to modify its operations to resume many key services such as ferries, oil terminals, logs, break bulk cargo and cruise shipping.  

Chief executive Derek Nind said today that good progress is being made on the recovery. The port's container business, which typically accounts for 40-to-45 percent of revenue, was hurt after its gantry cranes were made inoperable by the earthquake. It resumed a regular container service in mid-February thanks to weekly visits from an ANL ship able to drop off and pick up containers with its own cranes. 

"We were recently pleased to announce the resumption of regular container services at CentrePort using geared ships, with more services expected soon," Nind said. "Meanwhile, temporary repairs are well underway that should allow us to resume modified operations using our gantry cranes within four to six months."

He said the port operator is in the midst of one of its busiest cruise seasons, and is also seeing strong volumes of other key trades such as cars and logs.

Excluding the impact of earthquake provisions and fair value adjustments, the port achieved underlying after-tax profit of $8.8 million in the first half, ahead of $5.7 million a year earlier.

At this time last year, the company paid a $2.6 million first-half dividend to its owners, the Wellington and Manawatu-Wanganui regional councils. However, it won't pay a dividend for the latest period, and is unable to say at this stage if it will pay a dividend for the full year.

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