KEY POINTS:
State owned coal company Solid Energy has reported an after-tax profit of $34.4 million for the 2007/08 financial year, well down on last year's record $96.4m.
It was still above earlier expectations and was boosted at year end by several export coal shipments at record prices.
The company will pay $34.375 million to the New Zealand Government, on October 31. Its previous dividend paid out was $20 million in 2006.
Solid Energy chairman John Palmer said that while the year was challenging for the business, with coal production and revenue down, the result was above expectations given the difficulties experienced early in the year.
Coal exports in the year were down to 1.9 million tonnes from 2.2m tonnes in 2007, and New Zealand coal sales were 2.5m tonnes (2.6m tonnes in 2007).
An additional 0.1 million tonnes, the company's 51 per cent share of Spring Creek Mine sales, lifted total coal sales for the year to 4.5m tonnes (4.8m tonnes in 2007).
Revenue for the year was $552.3m, down slightly on last year ($556.5m).
Palmer said there was a huge contrast in the results from the two halves of the year.
"In the first half of the year we reported a small loss of $2.7m, the result of ongoing production problems at Stockton export mine, industrial action and reduced demand from Huntly Power Station.
"By contrast, in the second half we increased production and productivity and achieved record export price settlements for all coal types - up to US$300/tonne ($453/tonne) for hard coking coal - a substantial increase on last year's international prices."
Cost increases started to hurt operations in the second half of the year, but increased export revenue offset most of the impact.
The challenge was to make the most of the record high export prices and to maximise revenue while controlling cost escalation, said Palmer.
"The company has a sound financial base which will allow us to grow the business significantly in the medium term."
Last year's record profit was boosted by significant one-offs, including the sale of a 49 per cent stake in Spring Creek Mine to Cargill.
Solid Energy chief executive Don Elder said the company's combined export and New Zealand revenue would approach $1 billion in the current year, on the back of the record international coal price settlements.
"If we are successful with our current and planned developments we expect our energy production to more than double within a decade, and our revenue to triple.
"This could include another $500 million from our renewable energy business and major additional contributions from coal seam gas, coal gasification and potentially, longer term, a world-scale, world-class coal-to-liquids plant."
- NZPA
