Asbestos claims hit Hardie for another $100m
James Hardie will be forced to pay more than $100 million extra to asbestos victims after it was hit with more claims than expected in the past 12 months.
The company had believed the "peak year" for asbestos claims was 2010-11, but a jump in the number of claims since March last year means it will have to pay an extra $117 million into a special victims' fund.
The readjustment is also partly due to a projected increase in the future number of claims for a number of disease types.
It means the company's asbestos liability now stands at an estimated $1.7 billion, up from $1.58 billion a year ago.
The news comes as Telstra admitted this week that more of its cabling pits, which are being used to roll out the federal government's national broadband network program, contain traces of the deadly asbestos fibre.
James Hardie's 2013 financial report says there were 542 new claims filed against the company since March last year, compared with 456 claims filed in the previous 12 months.
The increase in the number and cost of claims has caught the company off guard.
"During fiscal year 2013, mesothelioma claims reporting activity has been above actuarial expectations for the first time since fiscal year 2009," the company's annual report said.
"One of the critical assumptions used to derive the [claims] estimate is the estimated peak year of mesothelioma disease claims, which was targeted for 2010-11."
New claims from mesothelioma victims had been falling, from 494 in fiscal year 2011 to 456 in the 2012 fiscal year.
The average claim settlement has also risen in the past 12 months.
In fiscal year 2013, the average claim settlement of $231,000 was $12,000 more than the previous year.
The increase in the average claim settlement was due largely to the rise in mesothelioma claims, which are "more costly to settle and represented a larger proportion of total claims than in fiscal year 2012".
Asbestos claims paid of $121.3 million for fiscal year 2013 were consistent with actuarial expectations of $122.2 million.