BusinessDesk: Woolworths recoups $27.7 mln from insurers in 2011 for Christchurch quake damage

BusinessDesk: Woolworths recoups $27.7 mln from insurers in 2011 for Christchurch quake damage

By Paul McBeth

Insurers for Woolworths’ New Zealand supermarkets copped a bill of $27.7 million from the September 2010 and February earthquakes in Christchurch, according to its local financial statements.

The Australian retailer’s New Zealand supermarket operation booked the insurance recovery as revenue in the year ended June 26, 2011, it said in statements lodged with the Companies Office last month. That made up almost half the $64.6 million in non-operating revenue in the period, while sales rose 3.5 percent to $5.37 billion.

Woolworths took a $14.8 million hit on the earthquake from costs not covered by its insurance cover, according to the parent company’s annual report, published in September.

The local holding company, Woolworths New Zealand Group, reported net profit of $99.8 million in the year, down from $100.7 million a year earlier. The Australian parent had previously said New Zealand supermarket pre-tax earnings rose 5.1 percent to $244 million.

In November, the Reserve Bank estimated the Canterbury quakes will result in claims worth some $30 billion as local firms seek to recover costs from interrupted business, temporary accommodation, inflation and other adjustments. Government officials have forecast the quakes caused more than $20 billion of damage to property in the region, though that predates the recent swarm of temblors since Christmas.

Woolworths, which completed a nationwide rebranding of its local chain to Countdown last year, has 158 stores in New Zealand. It is battling the three Foodstuffs cooperatives that operate the Four Square, New World and Pak’nSave chains. Its annual revenue of $5.37 billion in the 2011 year compares to the combined revenue of $8.2 billion for the Auckland, Wellington and South Island Foodstuffs cooperatives.

In October, the Australian retailer said its New Zealand supermarkets boosted sales 3 percent to $1.42 billion in the 14 weeks ended Oct. 2. That accounts for about 8.9 percent of sales in Woolworths’ supermarket division and 7.7 percent of the entire group’s A$14.6 billion in revenue.

Shares in Woolworths rose 2 percent to A$25.71 in trading on the ASX yesterday.

(BusinessDesk)

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