Solid Energy posts $86m record annual profit

State-owned coalminer Solid Energy posted its highest annual net profit of $85.8 million, against last year's write-down affected $6.3 million surplus, on the back of record sales.

The company, which paid a $20m dividend to the Government, said today it boosted total sales by 42 per cent to $570m for the year ended June 30, and increased production by 5 per cent to 4.7 million tonnes.

"While the year has been challenging on a number of fronts, high export prices and continuing strong New Zealand sales have returned the record after-tax profit," chairman Tim Saunders said.

Last year's profit was cut by pre-tax asset write-downs of $46m.

Exports, driven by strong Chinese and Asian demand, rose by 13 per cent to a record 2.5m tonnes. Domestic sales, dominated by NZ Steel and Genesis Energy, were little changed at 2.2m tonnes, in part due to 17 days' industrial action across the country, the company said.

Solid Energy is investigating alternatives to burning coal, with penalties expected in future for carbon dioxide producers due to efforts to reduce global warming, and says it is Australasia's largest non-forestry biomass energy company.

"By focusing only on the conventional coal business, it was clear that the company was vulnerable to many factors that were not predictable and were beyond its control," Mr Saunders said.

Solid Energy is trialling coal seam gas in Waikato, and is investigating potential uses for low-grade lignite coal reserves in Southland.

- NZPA