The year to 30 June 2010 was a year of two halves for state-owned coal miner Solid Energy.A net profit after tax of $67.8m represents a major turnaround on a $6.5m loss at the half year – but is 39% down on last year's full year result of $110.8m.So
The year to 30 June 2010 was a year of two halves for state-owned coal miner Solid Energy.
A net profit after tax of $67.8m represents a major turnaround on a $6.5m loss at the half year – but is 39% down on last year’s full year result of $110.8m.
Solid Energy chairman John Palmer attributed the reduced full year profit to weak international demand and prices and prolonged industrial action.
Revenue is down 29.6% on last year to $690m, with almost two thirds achieved in the second half of the year. No announcement on full year dividend has been made.
The second half turnaround was fuelled by higher export prices for some hard coking shipments carried over from a 2009 customer commitment – with a lift from $US100 per tonne early in 2009 to US$200 per tonne in the fourth quarter - and a number of one-off items, including additional unbudgeted sales to NZ Steel.
An unfavourable shift in foreign exchange rates during the year was partially offset by currency hedging, which contributed $30m before tax.
Total spending during the year can be broken down to $172m of direct capital expenditure by the company, $19m by 51% joint venture Spring Creek Mining Company and $134m on leased capital items, mainly at the flagship Stockton Mine.
A total $249m has been invested or committed to Stockton.
Also this year, the company completed its $34m third wood pellet plant in Taupo and a $17m biodiesel production facility at Rolleston.
Looking forward
Looking forward, Solid Energy is projecting increased coal production and continued work on its $22m underground coal gasification pilot plant, with gas production expected to begin in 2011.
The company will move to advance various major lignite developments in Southland over the next decade, including coal to liquids, coal to fertiliser, lignite briquetting for the domestic and export markets, and lignite/biomass to synthetic crude.
Presentation slides show that the company expects to produce 1.2m tonnes of coal-derived urea from 2016, and up to 35,000 barrels of coal-derived liquids per day by 2020.
