Impact of Cyclone Gabrielle – Update

MARKET RELEASE
28 June 2023

Impact of Cyclone Gabrielle - Update

Bremworth Limited (NZX: BRW) provides the following update on its mitigation and business
continuity plans following Cyclone Gabrielle which impacted its Napier yarn spinning plant on 14
February 2023.

• It has agreed to a further partial settlement of $15.5 million plus GST, where applicable, with its
insurers - taking the total partial settlement to date to $35.5 million plus GST, where applicable.

• These amounts have been, and will continue to be, used to put BRW in a very strong position to
continue implementing its mitigation and business continuity plans, to support affected staff and to
meet its ongoing obligations.

• Further insurance payments are expected upon completion of the assessment of damage to
buildings, plant and equipment, and the loss of inventory and profit, due to the interruption to the
business from Cyclone Gabrielle.

• The Directors are in the process of appointing external consultants to assist the Board with a
strategic review, including our supply chain and manufacturing cost base to support the Board’s
decisions regarding the application of those insurance payments.

• Clean-up at the Napier site is virtually complete, with buildings, plant and equipment now in a
steady state pending a decision on appropriate next steps.

• The detailed assessment of damage to buildings, plant and equipment has been completed by an
independent, multi-national, engineering consultancy, appointed by BRW. The results are
currently in the process of being reviewed by the loss adjustors and their own experts.

• Original indications that the Napier plant is likely to be offline for a yet to be determined, but
significant, amount of time remain unchanged. However, the Board expects to be in a better
position to update shareholders once the experts have had the chance to fully work through the
damage assessment.

• In order to secure the Company’s future, BRW previously advised that the following alternative
supply arrangements had been, or were being, put in place:

o the supply of yarns from an independent New Zealand yarn spinner, with this source
accounting for approximately 10% of our total yarn requirements.

o the use of independent third-party dyeing facilities to supply the Whanganui yarn spinning
plant, with this arrangement accounting for a further 25% of total yarn requirements.

o the supply of NZ wool yarns from overseas suppliers – which will account for the balance
of its requirements and with trials underway.

• The trials of yarns from some overseas yarn suppliers have been successful and early-stage
orders in modest quantities are underway.

• At the same time, the use of the independent third-party dyeing facilities to supply the Whanganui
yarn spinning plant with dyed fibre has also gone much better than expected, with the Whanganui
plant now able to produce both felted and woollen spun yarns – putting the Company in an
encouraging position.

• Our priority remains our people – many of whom are playing a large part in the clean-up and site
stabilisation of the Napier plant. They are doing a tremendous job amidst ongoing uncertainty
about the plant’s future. This work is supported by our business interruption insurance.

• We are also in continuous discussions with our distribution partners, with the focus on ensuring
we can continue to supply key product ranges despite the challenging circumstances.


ENDS

For further information please contact:

Greg Smith
Chief Executive Officer
gregsmith@bremworth.co.nz
+64 21 711 622

Mark Devlin
Director
IMPACTPR.CO.NZ
+64 21 509 060