Cyclone insurance payouts have made a significant impact on the profitability of carpet company Bremworth, with the firm announcing a profit of $11 million for the half year ending in June, a notable increase from the previous year's $2.2 million.
However, when excluding the one-off factor, Bremworth posted a loss of $2.4 million for the 2023 financial year. This loss was attributed to disruptions in the supply chain following Cyclone Gabrielle, challenges in the construction sector, and an overall economic slowdown.
In the previous year, the company had achieved a net profit after tax of $1.7 million, according to the RNZ.
Bremworth's chief executive, Greg Smith, noted that the impact of the cyclone had prominently influenced this year's outcomes. Nevertheless, he expressed satisfaction that revenue managed to remain relatively stable despite the challenges posed by the cyclone.
"An independent assessment has placed the estimated cost of remediation of buildings and plant and equipment at between $112.7m and $162m – so far the company has been paid out $35.5m of progress payouts and is anticipating significant further payouts,” Smith said.
Smith revealed that Bremworth's Napier operation was covered by material damage and business interruption insurance amounting to $271.3 million.
"While undoubtedly the most formidable event in our company's extensive history, we are confident that we will emerge from this experience as a more resilient and adaptable organization,” he said.
Furthermore, Smith emphasized that amidst the challenges, the insurance payments have led to the accumulation of substantial cash reserves for Bremworth. These reserves offer ample opportunities for growth and additional investments.
Bremworth’s gains from the event paint a better picture for some policyholders. Recently, Tower chief claims officer Steve Wilson addressed the complaints lodged at the insurer after reports from policyholders that they did not hear back from the insurer months after they filed their claims.
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