Windfall half-year result for coalminer

State-owned coalminer Solid Energy has described its record $26.3 million after-tax half-year profit as a windfall.

High world coal prices and a favourable exchange rate helped the profit jump 66 per cent for the six months to December 2002.

Exports were up 20 per cent to 1.03 million tonnes. Total sales volume rose 16 per cent to 1.94 million tonnes.

Chairman Tim Saunders said that while high international prices and low exchange rates were "significant factors" in producing the strong result, the use of the last of its carried forward tax losses had also contributed to what was a "windfall surplus".

He said he expected the recent climb in the value of the New Zealand dollar and drop in export prices to "significantly reduce export margins" in coming months, once favourable short-term foreign exchange hedges ran out.

Revenue for the Christchurch-based company, which mines coal on the West Coast, Southland and Huntly, was up 10 per cent, at $147 million.

Chief executive Don Elder said the company was looking at options to reduce its transport costs, particularly from its West Coast mines.

This refers to Solid Energy's long running dispute with Tranz Rail, which has asked for financial help from the SOE if it wants to increase the amount of coal taken by rail from the West Coast to Lyttelton.

Elder said coal remained the lowest cost energy source for much of New Zealand's demand, despite the estimated 1c/kWh carbon tax on coal-derived electricity.