Australian businesses impacted by bushfires
Written on the 6 January 2020 by David Simmons
Australia's deadly bushfires have ravaged the country over the Christmas and New Years holiday period in an unprecedented way.
At least 19 people have died, and at least 1400 homes have been destroyed in fires along the east coast and in South Australia.
So bad have these bushfires been that the Federal Government has mobilised the country's military at a scale not seen since World War II to carry out an evacuation and rehabilitation effort.
In NSW and the ACT 3.6 million hectares have been burnt, greater than the size of Belgium, and many people have lost their livelihoods, especially those with businesses in rural Australia.
On Friday Costa Group (ASX: CGC) announced that the citrus and berry portfolio it leases exclusively from Vitalharvest Freehold Trust (ASX: VTH) have been impacted by the bushfires burning in southern NSW.
These fires, one of the 140 bushfires still burning in the state, impacted Vitalharvest's Tumbarumba berry farm, which accounts for six per cent of VTH's plantings.
The Dunns Road fire, which has burnt over 130,000ha of land according to the NSW Rural Fire Service, has damaged the packing shed at Tumbarumba but spared the plants.
Access to the farm remains a problem, and a full assessment of the damage will not be able to be completed until the region is safe and accessible.
Accommodation provider Aspen Group (ASX: APZ) this morning announced that its business has been materially impacted by the fires in NSW, specifically at its Barlings Beach and Tween Waters properties, but none of its properties have so far been damaged by fire.
"All major roads servicing the region have been intermittently closed and food, water, power and telecommunication supplies and services have been interrupted," says Aspen.
"Tourists and residents have been asked to leave the region. It is not known when trading conditions will return to normal."
The company expects both revenue and net operating income for the combined properties to be negatively impacted by at least $500,000 due to the bushfires.
"The longer-term impacts are difficult to predict given the considerable damage to the region including loss of houses and businesses," says Aspen.
Naturally when a disaster of this scale occurs the insurance companies costs soar. This is certainly the case for IAG (ASX: IAG) which has received over 2,800 bushfire-related claims since the beginning of September, with in excess of 1,500 of those lodged since the beginning of December 2019.
IAG anticipates its net natural peril claim costs for the six months ending 31 December 2019 will approximate $400 million post-quota share, compared to last year's perils allowance of $320 million.
The group anticipates the overall cost for bushfire claims in 1H20 will be in the ballpark of $160 million.
"Our priority is to help customers affected by these terrible events as soon as possible, while minimising the personal risk to those facing these ongoing catastrophes," says IAG Australia CEO Mark Milliner.
"Our assessors and claims teams are on standby to support customers when it is safe to enter impacted areas, and our partner builders have the capacity to enter those regions when practicable."
How to donate
If you would like to donate to an organisation assisting the victims of the bushfires the following organisations are accepting any and all help available:
Business News Australia
Author: David Simmons