State-owned enterprise Solid Energy has finished a
forgettable financial year, with its after-tax profit plunging
146% to a loss of $40 million and no repeat of last year's $30
Once mooted by the Government as being in a clutch of
state-owned enterprises to be floated on the stock exchange,
Solid Energy could be years away from any float.
Revenue, coal sales and exports were mostly in double figures
the previous year, but those gains were undermined by a 40%
plunge in the global price of specialist hard coking coal,
prompting the loss of almost 500 jobs across Solid Energy.
While affecting staff across the country, hardest hit was
Greymouth on the West Coast, where 220 jobs were lost at the
Spring Creek mine and adjacent processing plant.
Solid Energy chief executive Don Elder shocked the resource
sector in mid-August by announcing a likely $200 million
revenue slump this financial year, and was prompting a
wide-ranging review of all its operations, shortly after
beginning with the first of a series of redundancy proposals
leading to loss of 445 jobs by mid-October.
Revenue for the year to June was up 18% at $978.4 million,
cash flows up 10% to $142.2 million, coal sales up 13% to 4.6
million tonnes, but in order to counter plunging coal prices,
Solid Energy booked $110 million in impaired asset charges
(on its closed or restructured assets) which slashed the
previous full year's profit of $87.2 million to a loss of
Yesterday, Dr Elder said he now expected prices to remain
"weak for one to two years, compounded by the continuing
strong New Zealand dollar".
"Despite this, major companies in our sector remain bullish
in the long-term due to continuing global urbanisation and
industrialisation," Dr Elder said in the annual report.
Since 2009, capital investment, including $120 million in a
processing plant at Stockton mine, had increased debt by $257
million. During the past year total liabilities, driven by
increased borrowing, went up 21% for Solid Energy, from
$614.1 million a year ago to $743.5 million, he said.