Freightways signals uninsured cost from earthquake

Friday 11th March 2011

Express parcel company Freightways said its insurance does not cover an estimated $1.5 million of revenue lost as a result of the Christchurch earthquake.

The company said its business continuity insurance covered incremental costs to its operations resulting from the earthquake but it did not cover lost revenue in the express package businesses.

Freightways operates the New Zealand Couriers, Post Haste, Castle Parcels and Sub60 brands and also has other businesses.

"The adverse operating earnings impact on Freightways of this lost revenue from its Christchurch branches, and from other branches around New Zealand that both supply to and receive goods from Christchurch, is expected to approximate $1.5 million for the 2011 financial year," the company said.

It defined operating earnings as earnings before interest, tax, depreciation and amortisation.

Freightways has five primary sites in Christchurch.

It said that from the Wednesday morning following the earthquake on Tuesday it was able to ensure delivery of medical supplies and urgently required equipment.

"During the second week following the earthquake, business activity started to recommence amongst most of our Christchurch customer base, although as expected not all customers are fully operational yet," the company said.

Freightways shares were down 2c at $3.15 in morning trading, having fallen from $3.28 on Tuesday.

NZPA

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