January 6, 2020 / 4:49 AM / 13 days ago

Australian bushfires hit businesses, damage still being assessed

SYDNEY (Reuters) - As Australia’s deadly bushfires rage, many companies are reporting hits to business with resorts shutting their doors, cheesemakers struggling to secure milk supplies and insurance claims on the rise.

As many as 5,850 fire-related insurance claims have been lodged since early November with insured losses estimated at A$375 million (£286 million), according to the Insurance Council of Australia (ICA). However, with conditions still too dangerous in many areas, the full cost of the disaster is not expected to be known for several weeks.

The fires have ripped through more than 6 million hectares (14.8 mln acres) of land in the two most populous states of New South Wales (NSW) and Victoria, killing 24 people so far, razing thousands of buildings and leaving some towns without electricity and mobile coverage.

Aspen Group (APZ.AX), which owns tourist parks in idyllic beach towns like Tomakin on the NSW south coast, said on Monday it has turned away holidaymakers from its rentals as a result of the fires and expects a hit of at least A$500,000 (£265,400) to its revenue.

“Fire activity along the NSW south coast has been catastrophic with significant loss of life, housing and infrastructure,” Aspen said in a statement.

“Tourists and residents have been asked to leave the region. It is not known when trading conditions will return to normal,” it said, although none of its properties have been affected by the fires.

Bega Cheese, which operates two sites the NSW district it is named after, said its employees and dairy suppliers had been affected by the bushfires, sending its shares sinking nearly 9% on Monday.

In Victoria, which accounts for one-third of Australia’s milk production, fires are expected to have killed large numbers of livestock, gutting a A$3.3 billion industry.

Vitalharvest Freehold Trust (VTH.AX), which leases farms to Australia’s largest listed fruit and vegetables grower Costa Group (CGC.AX), said the fires had damaged a packing shed, including equipment and vehicles at one of its berry farms.

The farm comprises about 6% of Vitalharvest’s berry plantings, it said, adding a full assessment was yet to be carried out.

Kangaroo Island Plantation Timbers (KPT.AX) requested a trading halt on the stock exchange until Tuesday, pending an announcement on the “current fire situation.”

Kangaroo Island is a popular holiday spot in South Australia where two people died as dangerous fires burned over the weekend.

Last week, Insurance Australia Group (IAG.AX) said it expected to pay roughly A$400 million in natural peril claims for the six months to Dec. 31. That is more than half of its A$641 million natural peril allowance for the fiscal year.

Rival Suncorp said it had received more than 1,500 claims since the fires began in November. “However, the full impact will not be known for several weeks until areas are safe to access.”

Reporting by Swati Pandey; Editing by Sam Holmes

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