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Solid Energy's output up 7% in half year with strong NZ sales
4 April 2007 - New Zealand's largest coal miner Solid Energy raised coal production by 7.3% to 2.34 million tonnes in the half year to December 2006 from 2.18 million tonnes in the same period of 2005.
Solid Energy says strong New Zealand sales and steady export performance marked the half year, though industrial action had affected production in the 2005 half year.
New Zealand sales increased 18% to 1.22 million tonnes in the latest half from 1.03 million tonnes in the corresponding period of 2005.
Exports remained in line with the previous period at 1.12 million tonnes (2005: 1.15 million tonnes).
Solid Energy reports record revenue of $274.1 million for the December 2006 half year, up 7% on the $257.1 million recorded in the same period of 2005.
A net surplus after tax of $35.1 million for Solid Energy was down slightly due to decreased export prices from $38 million in 2005.
Returns on shareholders funds fell to 28.0% in the six months to 31 December 2006 from 40.7% in the December 2005 half. No dividend was paid in either period.
Solid Energy chairman, John Palmer, says, “The short-term outlook for the company remains positive and the balance sheet is strong. International coal prices have remained strong with the anticipated drop in hard coking coal prices slower than expected, although the high New Zealand dollar will increasingly impact our export revenues.
“Proving new economic resources and developing new mines remains a challenge for the company, as does containing costs, particularly to ensure that our thermal coal can continue to compete with imports into New Zealand,” Mr Palmer said.
Chief executive officer, Dr Don Elder, says the company's priority for the next period is to resolve the uncertainty around some of its operations. “At Huntly East (Waikato) Solid Energy is in negotiation with New Zealand Steel to renew our supply contract; while the Terrace mine at Reefton was under review as it continues to face a number of operational challenges.”
“On the upside, Cargill's investment at Spring Creek is a significant boost for the future of that operation. The agreement will secure forward coal sales, underwrite our capital investment programme and help us to plan with certainty the long-term future of the mine past the current five-year plan,” Dr Elder says.
In Southland the company was also looking to the potential of Southland's huge lignite resources with a drilling programme near Mataura area to further define the coal resource.
In November 2006, Solid Energy unveiled a $100 million investment in a 20-year programme to address the viability of applying clean coal technologies in New Zealand and the development of alternative fuels. This includes new coal-based energy sources, such as coal seam gas currently being piloted in the Waikato, and the further development of biomass for industrial and commercial energy.
Source: Solid Energy.
New Zealand sales increased 18% to 1.22 million tonnes in the latest half from 1.03 million tonnes in the corresponding period of 2005.
Exports remained in line with the previous period at 1.12 million tonnes (2005: 1.15 million tonnes).
Solid Energy reports record revenue of $274.1 million for the December 2006 half year, up 7% on the $257.1 million recorded in the same period of 2005.
A net surplus after tax of $35.1 million for Solid Energy was down slightly due to decreased export prices from $38 million in 2005.
Returns on shareholders funds fell to 28.0% in the six months to 31 December 2006 from 40.7% in the December 2005 half. No dividend was paid in either period.
Solid Energy chairman, John Palmer, says, “The short-term outlook for the company remains positive and the balance sheet is strong. International coal prices have remained strong with the anticipated drop in hard coking coal prices slower than expected, although the high New Zealand dollar will increasingly impact our export revenues.
“Proving new economic resources and developing new mines remains a challenge for the company, as does containing costs, particularly to ensure that our thermal coal can continue to compete with imports into New Zealand,” Mr Palmer said.
Chief executive officer, Dr Don Elder, says the company's priority for the next period is to resolve the uncertainty around some of its operations. “At Huntly East (Waikato) Solid Energy is in negotiation with New Zealand Steel to renew our supply contract; while the Terrace mine at Reefton was under review as it continues to face a number of operational challenges.”
“On the upside, Cargill's investment at Spring Creek is a significant boost for the future of that operation. The agreement will secure forward coal sales, underwrite our capital investment programme and help us to plan with certainty the long-term future of the mine past the current five-year plan,” Dr Elder says.
In Southland the company was also looking to the potential of Southland's huge lignite resources with a drilling programme near Mataura area to further define the coal resource.
In November 2006, Solid Energy unveiled a $100 million investment in a 20-year programme to address the viability of applying clean coal technologies in New Zealand and the development of alternative fuels. This includes new coal-based energy sources, such as coal seam gas currently being piloted in the Waikato, and the further development of biomass for industrial and commercial energy.
Source: Solid Energy.
