The financial costs of Queensland’s flood disaster continue to mount, with insurers, retailers and resource companies still trying to quantify the losses caused by the crisis.
While the flood waters in the south east Queensland cities of Brisbane and Ipswich appear to have peaked, authorities estimate that it will take some days before the flood waters recede.
Many businesses in Brisbane again remain closed today as the city remains in a virtual shutdown.
Last night, retail giant JB HiFi said 12 of its 32 stores are closed, although this is mainly for safety reasons – the power has been cut at many stores and staff are unable to get to and from work safely.
However, the company’s Ipswich store does remain at risk of physical damage, although JB HiFi said in a statement to the ASX that the financial impact will be minimal.
Other retailers to feel the fallout of the financial crisis include Woolworths, which says stocks are now running low at Queensland stores, and The Reject Shop, which went into trading halt yesterday. Its key distribution business, which supplies 90 of its 210 stores, is located at Ipswich.
Investors are also starting to get a feel for how the crisis has affected the insurance sector.
This morning, Insurance Australia Group said it had already had 2,400 claims from Queensland customers, although it declined to quantify the potential financial impact of the floods. However, with Brisbane claims still presumably to start coming in, IAG’s exposure is likely to rise substantially.
Suncorp Metway appears to be better placed. It said yesterday its exposure would be capped at $90 million, with further costs to be picked up by re-insurers.
Resources companies are also still being hit hard. Caltex revealed it will be hit with $5-10 million in impairment costs by heavy rains, while the latest projections for the coal industry suggest exports from the key coal sector will fall by as much as 14 million tonnes worth more than $3.5 billion.
Construction giant Leighton Holdings and even cinema chain Amalgamated Holdings have also warned they will be affected by the disaster.
The impact on smaller businesses is more difficult to quantify, although there are thousands of businesses that have suffered damage from the floods, and thousands more without power.
Queensland Premier Anna Bligh has warned some areas may he without power for days.
The Queensland Chamber of Commerce and Industry has estimated flood-affected businesses will lose 3% of annual turnover, or an average of $20,000.
But the chamber says that while most businesses have insurance for businesses and physical assets, only 50% of companies have income insurance.
Bligh has also started to warn Queenslanders about the task of rebuilding Queensland, three quarters of which has been hit by flooding.
“We now face a reconstruction task of post-war proportions. That is how we see it,” she told a press conference this morning.
The state’s Local Government Association says the rebuilding of key infrastructure destroyed in the floods may take up to two years, with a damage bill that is now likely to top more than $1 billion.
LGAQ estimates that between 70,000- 90,000 kilometres of council roads have been damaged by floods.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
