- Kangaroo Island Plantation Timbers (KPT) has been hit by its second bushfire in just two weeks
- On Christmas Eve, 891 hectares of the Kangaroo Island estate was damaged
- As the first fire was settling, another broke out in December 30 to burn 971 more hectares
- Both fires were caused by lightning
- Fortunately, the company has fire insurance to offset the worst of the costs
- Still, the destruction from the fires has caused shares to dip 11 per cent today, trading for $2 each
Kangaroo Island Plantation Timbers (KPT) has been ravaged by the second bout of bushfires in just two weeks at its South Australian timber estate.
The country’s only ASX-listed timberland company has seen almost 2000 hectares of its Kangaroo Island plantation go up in flames since Christmas Eve. Company management is now working hard to start the process of rebuilding and salvaging what it can.
The first fire broke on Christmas Eve and raged through 891 hectares of the Duncan area of Kangaroo Island. KIPT said the fire has been contained but there is still some potential for flare-ups.
As the Duncan fire was settling, KIPT was unfortunately ravaged by two more fires in the Ravine des Casoars Wilderness Protection Area on December 30. These new fires have damaged another 971 hectares of land, representing seven per cent of the total KPT estate.
Both the Duncan and the Ravine fires were caused by lightning strikes, according to KIPT.
Fortunately for the company, some preemptive measures in the form of fire insurance will help offset the worst of the costs from fighting the fires and rebuilding thereafter. KIPT said its fire insurance covers the standing tree crop and will help pay off miscellaneous costs — including fire fighting, clean-up, and replanting.
The insured value of the standing timber damaged by the Duncan fires is $11.6 million. The area hit by Monday’s Ravine fires has an insured value of $8.45 million.
KIPT’s management is leading by example as Managing Director Keith Lamb and Executive Director Shauna Black stayed on the island during the worst of the Ravine fires to help coordinate the firefighting. The company said as soon as the ground is safe, salvaging operations will begin.
Company management is holding on to a silver lining in the cloud of smoke by taking an opportunistic approach to the rebuilding of the burnt estate.
“While certainly costly for the company and its insurers, the opportunity to salvage fire-affected plantations will bring forward the employment and economic benefits of plantation forestry on Kangaroo Island that would not have occurred until after the proposed KI Seaport at Smith Bay had been realised,” KIPT said in an announcement to the ASX today.
The KI Seaport is planned to be an export hub for Kangaroo Island timber products. KIPT said the fires have not affected its commitment to build the port as soon as possible.
Still, the destruction from the fires has caused a slump in KPT shares. The company started the new year with a 11.11 per cent decline as shares trade for $2 each in a $112.84 million market cap.