Continued weak international coal prices contributed to a 28%
fall in revenue in the six months ended December for troubled
Government-owned coal producer Solid Energy.
It was withdrawn from the Government's mixed ownership model
partial floats when the level of its debt was revealed.
Revenue in the six months fell to $236.1 million from $328.1
million in the previous corresponding period.
Before interest and tax, the state-owned enterprise had a
loss of $29.7 million compared to a loss in the pcp of $265.5
Operating profit was $15.2 million, down 17%, and the net
loss after tax was $12.2 million, compared to a loss of
$321.7 million in the previous period.
The underlying loss, which excluded impairments and large
one-off items, was $28.7 million, compared with a $3.5
million profit in the pcp.
Operating cash flow was negative $1.2 million compared with
negative $55.8 million in the pcp, with $89.6 million in
decreased cash receipts from lower prices and reduced
domestic demand. Capital investment totalled $5 million
compared with $47.4 million in the pcp.
Acting chairwoman Pip Dunphy said the half-year result was
slightly better than expected as the company maintained a
strong focus on production efficiency, cash management and on
containing operating costs.
''The company's stringent controls on spending and
productivity improvements have had a positive impact on the
half-year result but weak global coal markets remain
The hard coking coal spot price weakened in the period, with
the monthly average for December down to $US135 ($NZ161) a
tonne compared with $US159 a tonne in December 2012.
The company's financial recovery was likely to be prolonged
and would depend on several factors including continuing
improvement in the business performance and higher
international coal prices, she said.
The slightly better than expected result meant the company
had not needed to draw down under the two $50 million working
capital facilities made available by the Crown as part of the
financial restructuring package put in place last October.
During the period, the company completed a major
restructuring of its business which started in August 2012.
Management and support jobs were cut at the Stockton mine and
further changes were made at Huntly East, cutting production
to about a third of the previous year's as the economics of
mining underground at Huntly could no longer justify keeping
the operation going in its current form, Ms Dunphy said.
At the end of December, Solid Energy employed 867 people,
compared with 1237 at the end of December 2012.