Coal miner Solid Energy - one of four state-owned enterprise energy companies National wants to partially float on the stock exchange - will deliver a total $50 million in dividends to the Government this year.
In its full-year to June report released yesterday, Solid Energy's revenue was up 20% to $829 million and its profit for the year rose 29% from $67.8 million to $87.2 million, while the total $50 million dividend to the Government was down slightly from $54 million last year.
Chairman John Palmer said in a statement yesterday the past financial year had been "incredibly challenging" for the company, but Solid Energy had an ongoing pipeline of projects either completed or in development, to increase both its coal production and renewable energy businesses.
Earlier in the past financial year Solid Energy started work on its $22 million pilot underground coal gasification plant on the Huntly coalfield, then later approved construction of its $25 million domestic-scale briquette plant in Mataura, which is scheduled to go into production in 2012.
"These projects will test the viability of technology to upgrade lower-rank Southland lignites and to access deep unmineable coal seams in the Waikato and will pave the way for other large-scale and more complex projects in future," Mr Palmer said.
The use of lignite has fired up environmentalists and the Green Party who see the use of low-grade lignite - estimated to be up to 15 billion tonnes around the southern South Island - as contrary to reining in New Zealand's carbon emissions.
Mr Palmer said it would take "some years to bring these large potential projects to fruition" but he believed they provided an opportunity to deliver value to the business and create significant benefits for New Zealand.
Earnings before interest and tax (Ebit) for 2011 year were up 19% from $116 million the previous year to $137 million.
However, Mr Palmer said that on average, the stronger New Zealand dollar against the US dollar, offset by hedging, reduced Ebit by $26 million and Solid Energy's new development growth projects reduced Ebit by $21.6 million, relative to last year.
"Over the next one to two years we expect New Zealand sales to remain steady.
"High international coal prices are expected to continue in the short term, but trend down in the coming year. Subject to international economic conditions, we expect continued steady growth in our businesses," Mr Palmer said.
The overall result was boosted by strong global coal prices and good production from the Stockton opencast mine at Buller on the West Coast; up 27% to 1.6 million tonnes.
Revenue rose 20% to $829 million in the year to June, with coal sales up 6% to 4.1 million tonnes. Despite increasing, coal volumes were less than planned because of delays at Lyttelton after the June earthquakes, which pushed the loading of three vessels into the 2012 financial year.
Solid Energy's biodiesel production was up 34% to 1.8 million litres, from 1.3 million a year earlier and its wood pellets production up 53% from 30,000 tonnes in 2010 to 46,000 tonnes, following the first full year of production at its new Taupo pellet plantMr Palmer said a record 136km of test drilling had been done during the past year.
Solid Energy's year . . .
• Coal exports - 2 million tonnes, up 20%
• NZ sales - 2.1 million tonnes, similar to 2010.
Work started on $22 million pilot underground coal gasification plant at Huntly coalfield.
Construction approved for $25 million domestic-scale briquette plant in Mataura.
