KEY POINTS:
Tax gains has helped state owned miner Solid Energy report a record profit this year, even though revenue and coal exports were down.
The company sold a record 4.8 million tonnes, up from 2006's 4.67m tonnes, which led to its highest-ever after tax profit of $94.1 million ($85.5 million) for the year ended June.
Sales within New Zealand were also at record levels at 2.61m tonnes (2.2m tonnes).
Total production was virtually flat at 4.65m tonnes. The company said it managed to maintain production , due in large part to the purchase of the New Vale Opencast Mine, near Gore, in December.
A major obstacle had been protest action an d environmental work to collect and relocate native land snails at its Stockton Opencast Mine, which caused the cancellation of five shipments earlier this year and shaved over 10 per cent off Stockton's production.
Solid Energy said ongoing security costs against protestors were costing over $1 million annually.
Other challenges were the high New Zealand exchange rate and lower US dollar-based export prices.
As a result, revenue and exports were down. Exports were 11 per cent lower to 2.19m tonnes (2.47m tonnes) and revenues were down marginally to $564.6 million ($569.6 million).
Earnings before interest and tax (ebit) was higher at $148.9m compared with $127.2m.
Operating surpluses (before write-downs, contract reversals and tax) was down 20 per cent on last year at $107 million.
But this was offset by a pre-tax gain of $41 million associated with Solid Energy's decision to continue mining at Spring Creek.
This allowed the company to reverse asset write-downs relating to the mine ($26.3 million) and to Cobden Rail Bridge ($14.8 million) from 2005.
The decision to continue mining also allowed the company to sell a 49 per cent stake in the mine for $24 million, resulting in a $9.7 million gain.
Solid Energy chairman John Palmer said it had been a good trading result, despite the Stockton situation.
"The company's financial position is sound and the balance sheet in good shape which is allowing us to continue reinvesting in mining assets, progress our investigations into the potential for using our lignite resources in eastern Southland and to invest further in the renewables and new energy areas of the business."
Solid Energy will not pay a dividend to the Government this year so it can reinvest in the company.
Chief executive Don Elder said new technologies would increasingly assist end-use consumers, and production from coal reserves too deep to mine with traditional mining techniques.
They included coal seam gas being trialled in the Waikato, coal gasification both above and underground, and the capture and underground sequestration of carbon dioxide.
"Not only are we now New Zealand's largest indigenous energy producer, but we are also New Zealand's leading biodiesel producer and the largest producer of wood pellets in the Southern Hemisphere."
During the year, the company had bought a Canterbury biodiesel producer and launched Switch, a solar water heating distributor and supply business.
Its established biomass business, Nature's Flame was still growing strongly and this year commissioned its first large-scale commercial wood pellet boiler.
- NZPA
