In its report on the half year to December, South Canterbury said its provisions for losses on impaired or non-performing assets had increased by $180.3 million, prompting delivery of an unaudited after-tax loss of $154.9 million.
Craigs Investment Partners broker Peter McIntyre estimated that 24%, or $408 million, of South Canterbury's $1.7 billion loan book was at present impaired.
"Their [earlier] indications to the market was the result wouldn't be good - they didn't disappoint.
"The impairments were much higher than the markets expected."
He said while impairment did not mean all loans would not be recovered in the future, having almost a quarter of its loan book impaired "was less than ideal" when normal expectations would be having 5% of impairments on its books, he said.
As part of its recapitalisation plans, Allan Hubbard sold 100% of Helicopters (NZ) and 64% of the shares in Scales corporation to South Canterbury for 317.7 million newly issued fully paid shares worth $152.5 million and $10 million cash in late February.
For their respective full year results, which totalled almost $30 million in after-tax profits, Helicopters (NZ) reported a $16.2 million profit and Scales $13.6 million.
Mr McIntyre said while the two companies' cashflows would be a welcome addition, he estimated $20 million of the $30 million "would be soaked up" by South Canterbury's having to pay the Government $20 million to be in its deposit guarantee scheme.
Mr McIntyre said he was disappointed these forthcoming payments were not addressed in the six-monthly result, describing the report as "short on detail" at a time when investors required reassurance.
According to an earlier investment statement released on February 10, there is $491 million due to be repaid by June and a further $640 million of borrowings due to be paid by October, before the Government's present deposit guarantee scheme ends in October.
Mr McIntyre said some of the total $1.13 billion would be debentures and bonds which could be rolled over, but "the issue of those repayments needs to be addressed", he said.
"They have had [investment] inflows and roll-overs around 55%, which is positive, but the question is how they would fund repayment of capital," he said.
Last week, in a separate announcement, South Canterbury brought forward its final payment to a US investment consortium, which because of a S&P downgrade last year, allowed it to call in its $US100 million loan.
Last week's $US17.5 million payment covered $US7.5 million due in February plus $US10 million, due in March.
The investment report on February 10 reported cash on deposit of $79 million and realisable assets of $12 million.
Earlier in January, $26.4 million was raised in a private placement of $1 convertible notes and had fully drawn down a $75 million loan from George Kerr's New Zealand Credit Fund, which was used to repay the US investment consortium.
South Canterbury said its half-year loss would be the result of increased [bad debt] provisioning, write-downs on investments and losses on foreign currency transactions.
"There is a [general] risk that impairment and bad-debt write-offs may impact on the company's financial position and its financial performance," South Canterbury said.
