Holcim writes down NZ manufacturing assets ahead of closure
By Pam Graham
July 7 (BusinessDesk) – Writedowns ahead of the closure of Holcim New Zealand’s Westport cement manufacturing plant in 2016 have blown a hole in the company’s accounts.
The accounts for the New Zealand holding company, Fernhoff Ltd, for the year to Dec. 31, 2013 filed to the Companies Office on Friday show $31 million of charges for the plant, comprising a $23 million impairment and $8 million project cost writedown.
The plant will close by the second half of 2016 when new import facilities at Waitemata in Auckland and Timaru costing $100 million are fully operational.
Plans for a new cement manufacturing plant at Weston in North Otago remain on hold but the company is keeping the assets so it has the option of “eventually building a new cement plant”.
“The directors note the impact on the financial statements due to the announced pending closure of the Westport cement manufacturing plant,” the Fernhoff accounts say.
The directors point out assets exceed liabilities in the balance sheet after the writedowns by $67.5 million. However, the balance sheet shows $55 million of intangible assets, most of which is goodwill for the cement, concrete, lime business.
The company is trying to sell its lime business, which it no longer regards as core business.
McDonalds Lime is majority owned by Holcim NZ and part-owned by New Zealand Steel and it has the country’s largest lime quarry at Oparure, north of Te Kuiti. The company also wholly owns Taylor’s Lime at Dunback in North Otago.
Holcim had sales in New Zealand of $200.57 million in calendar 2013, down from $219.4 million the previous year. It did not comment on supplies to the Canterbury rebuild.
Depreciation and impairment charges are taken above the line, producing a loss before tax of $51.8 million compared to a loss of $10.2 million last year when there was also $26.8 million of depreciation and impairment charges.
The company has deferred tax losses, which provided a $15.9 million positive in the income statement, helping to after-tax loss of $35.9 million. Holcim’s local unit reported a net loss of $7.8 million in 2012.