Slump to hammer Solid bonus payments

Solid Energy staff whose performance payments almost doubled last year are bracing for a hit after a slump in half-year profits.

The state-owned miner paid staff an extra $10 million, up from $5.2 million for the previous 12 months.

But given the dire start to the current year, the prospects for the "gain share" or profit component of this year's bonus are looking bleak.

"It's not looking very flash for gain share I can tell you, based on $6.5 million loss for the half-year," a spokeswoman said.

"Having said that, the outlook is improving."

The drastic fall from a 2008 half-year profit of $78.4 million was blamed largely on the drop in hard coking coal prices and the global economic downturn.

Solid Energy said the balance of the loss was largely attributable to five weeks of industrial action at the company's main coalmining sites late last year. About 745 workers shared in last year's bonus, including unionised staff, the spokeswoman said.

The big payouts came despite a Government decree that all state-owned enterprises should rein in costs.

The spokeswoman said Solid Energy's remuneration was based on exceptional performance as well as being influenced by the company's overall financial performance.

"If the company does well we all benefit. Profit is only one component. It's a way of recognising exceptional performance. It's a board-approved policy."

In its interim report released yesterday, Solid Energy said the introduction of the emissions trading scheme on July 1 would cause considerable uncertainty for the company.

Key uncertainties included the definition of eligible emission and regulations regarding the process for the company or customers to obtain credits as compensation for the costs of the scheme.