Wool carpet manufacturer Bremworth has reached a final insurance settlement for losses sustained due to Cyclone Gabrielle in February 2023.
The company confirmed that the total settlement amount is $104.2 million, with insurers set to pay a remaining balance of $42.2 million following previous progress payments of $62 million. The outstanding amount is expected to be disbursed by February 2025.
Bremworth chief executive Greg Smith said the settlement provides financial certainty as the company evaluates its strategy to restore operations to pre-cyclone levels.
Since the cyclone, the company has resumed operations at its Napier dyehouse and yarn twisting line, with further repairs to yarn-finishing equipment nearing completion.
Board chair George Adams acknowledged the complexity of the claims process, which covered both material damage and business interruption. He stated that the board is satisfied with the resolution and appreciates the cooperation of insurers and advisors.
The company plans to provide an update on its post-cyclone business strategy when it releases its FY25 half-year financial results in late February 2025.
In 2023, Bremworth confirmed that cyclone-related insurance proceeds significantly impacted its financial results, contributing to a half-year net profit of $11 million for the period ending June 2023, a sharp increase from $2.2 million in the previous year.
However, excluding the insurance payments, Bremworth reported a net loss of $2.4 million for the full 2023 financial year. The company attributed the loss to supply chain disruptions caused by the cyclone, challenges in the construction sector, and broader economic conditions. In 2022, Bremworth had recorded a net profit of $1.7 million.
In a previous statement, Smith said that Cyclone Gabrielle had a substantial influence on the company’s financials but pointed out that revenue remained steady despite the operational disruptions.
“An independent assessment has placed the estimated cost of remediation of buildings and plant and equipment at between $112.7 million and $162 million – so far, the company has been paid out $35.5 million of progress payouts and is anticipating significant further payouts,” he said.
Bremworth’s Napier facility was covered by material damage and business interruption insurance totalling $271.3 million. Smith acknowledged the cyclone as a major event in the company’s history but expressed confidence in Bremworth’s resilience and long-term strategy.
The insurance proceeds have strengthened Bremworth’s cash position, which Smith said would allow the company to explore investment and growth opportunities.
Cyclone Gabrielle brought severe weather, including up to 568mm of rain in 48 hours and wind gusts reaching 146 km/h. The storm’s impact was intensified by pre-existing saturated ground conditions, following an earlier flooding event on the North Island. The cyclone caused extensive damage to infrastructure and property, leading to 11 fatalities.
According to PERILS, the final estimate of insured losses from Cyclone Gabrielle was $2.17 billion, an increase from the $2.02 billion preliminary estimate released in August 2023.
The insurance losses were nearly evenly distributed between residential (51%) and commercial (49%) properties. PERILS’s report includes loss breakdowns by location and property type, covering structural damage, contents losses, and business interruption.
