Tegel warns Gita disruptions could hit profit by as much as $2 million
By Rebecca Howard
Feb. 22 (BusinessDesk) - Tegel Group, New Zealand's biggest poultry producer, said recent one-off costs could hit net profit by as much as $2 million after the water supply to one of its processing plants was cut off by ex-cyclone Gita and after an ammonia leak from a valve on a chilled water tank prior earlier in the week.
Gita whipped through the country early this week, sparking a state of emergency in several towns, including New Plymouth, as heavy winds and rain wreaked havoc. The Auckland-based company is still trying to work out the cost and currently estimates net profit will be cut by between $1.5 million and $2 million.
"Areas of the New Plymouth region are without water supply, including the company’s processing plant located there. The plant suspended full production yesterday however parts of the production line will resume today and the feedmill is operational. We have been advised by the council that the water main will be reconnected within the next 24 hours," Tegel said in a release to the stock exchange.
The New Plymouth Distribution Centre continues to be operational and is working closely with Tegel’s processing facilities in Auckland and Christchurch to source product and minimise disruption for customers, Tegel said.
The company also said there was an ammonia leak from a valve on the chilled water tank at the New Plymouth production facility earlier in the week. "The leak was quickly contained and no one was injured as a result of the incident," it said.
No production was taking place at the time. While production resumed as usual at the start of the week the company incurred stock losses from the chiller relating to product which was being readied for further processing, Tegel said.
The shares fell 1 percent to $1.03 and have fallen 11 percent so far this year.