Freightways has announced expectations of a $1.5 million revenue downturn in the wake of the Christchurch earthquake, as not all its revenue streams were insured.
Managing director Dean Bracewell said that while business continuity insurance covered incremental costs to its operations, it did not cover lost revenue in its express package businesses.
"Following analysis of the second and third weeks' freight volumes in to and out of Christchurch since the week of the earthquake, it appears that some lost revenue may not be recovered," he said in a statement to the market yesterday.
Shares in Freightways were down 2c at $3.15 after the announcement.
Mr Bracewell said the impact on operating earnings from the revenue loss was expected to be about $1.5 million for its financial year 2011.
Freightways' five primary sites in Christchurch received only minor damage and it was able to deliver medical supplies and urgently-required equipment after the quake. However, as expected, not all its customers were fully operational a fortnight after the quake.
In its half-year to December report released in mid-February, Freightways lifted its after-tax profit by 9% from the same period a year ago to $15.8 million, as freight volumes in various sectors had increased.
