Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Mark Burton Speech: Solid Energy—annual report


Mark Burton Speech: Solid Energy—annual report

Thank you for inviting me to speak to you this evening. Tonight is a celebration of Solid Energy’s success, and it’s a privilege to join you.

Yesterday, I took great delight in tabling Solid Energy’s 2002 annual report in the House. It was wonderful to put on record this company’s significant turnaround over the last three years.

In 2002, Solid Energy took its place as the 5th most profitable State-Owned Enterprise. You can be proud of your performance. I certainly am.

You have achieved record export sales of 1.8 million tonnes, record total sales of 3.35 million tonnes, record revenue of $264.5 million, and record profits of $38 million—all of which are significant achievements.

At the same time, the Company has been paying greater attention to its social and environmental responsibilities, as is appropriate for our SOEs.

Yet only three years ago, Solid Energy was close to bankruptcy, having incurred a loss of $86 million in the 1998/99 financial year. Shareholders’ funds had been reduced to only $36 million.

The Asian financial crisis was in full swing, leading to a significant reduction in both the price and demand for coal. The Mt Davy mine had to be closed for safety reasons.

The previous management and board of Solid Energy had entered into an inappropriate level of forward foreign exchange cover. And—adding to the pressure—the company was forced to take out government loans of more than $40 million.

I am delighted to see that all this is now history. The original loans have all been repaid with interest, and Solid Energy has proved to be a very good investment indeed for the Crown.

It has also been good for New Zealand Incorporated, with the Company generating $160 million in foreign exchange earnings last year.

This turnaround in performance could not have been achieved without the dedication and determination of Solid Energy’s staff, management and board, who never wavered in their efforts to make this company successful again.

It’s also important to acknowledge that this company’s fantastic turnaround could also not have been achieved without Solid Energy’s customers and suppliers, some of whom are here tonight. I thank you on behalf of Solid Energy for your ongoing support.

And now—you are now ready to achieve even more in the future, and are presently implementing a long-term plan, which aims to double both production and exports over the next 5-10 years.

And, while any export commodity producer is subject to the ups and downs of the international market, I have quiet confidence that with the dedication and determination of its staff, and the leadership of the Management and Board, Solid Energy has every chance for continued success.

Finally, thank you and congratulations to everyone involved in turning Solid Energy around. I wish you every success for the future.

(496 words)
Appendix I - Key indicators
Solid Energy New Zealand Ltd All figures $ millions unless stated 2001/02 2000/01 1999/00 1998/99
Operating Revenue 264.5 219.3 185.9 159.9
Operating Profit / (Loss) before unusual items 38.1 5.6 (0.8) (8.7)
Unusual items - - 0.9 (77.9)
Net Profit / (Loss) Before Taxation 38.1 5.6 0.1 (86.6)
Income Tax Credit / (Taxes Paid) - 0.6 1.1 0.6
Net Profit / (Loss) After Taxation 38.1 6.0 1.3 (86.0)
Dividends paid - - - -
Crown subordinated debt (repaid)/drawn down (45.4) - - 42.0
Return on average shareholders’ funds 61% 14.7% 3.4% (108%)
Return on total assets 25.3% 4.5% 3.3% (4.1%)
The improved financial performance is primarily due to higher volumes, lower overhead, transport and mine production costs per tonne, as well as the elimination of most remaining adverse forward foreign exchange contracts that were entered into by Solid Energy in 1997.

Volumes
(millions of tonnes) 2001/02 2000/01 1999/00 1998/99
Tonnes of coal sold 3.35 2.97 2.81 2.57
Tonnes of coal exported 1.80 1.66 1.42 1.19
Financial Position

Solid Energy’s financial position has improved significantly over the last year, and it has repaid all of the Crown’s subordinated debt, which had been advanced in 1999 due to the substantial losses that were incurred during 1998/99.
Financial Indicator 2001/02 2000/01 1999/00 1998/99
Equity to Total Assets 47.9% 33.1% 27.5% 22.1%
Debt to Debt + Equity (net of cash) 21.6% 57.6% 64.2% 62.9%

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Cop Shop Top-Up: 1800 New Police Through NZ

Police Commissioner Mike Bush has today confirmed further details around the allocation of the 1800 additional officers, following a $298.8 million increase for Police in Budget 2018...

“These 1800 officers, alongside 485 support staff, will really enhance our work to keep people safe, and ensure they feel safe,” says Mr Bush. More>>

 

Human Right Commissions: Concern On Aged Care And Consent

A new report published by the Human Rights Commission raises concerns about the legal and human rights safeguards for an estimated 5000 elderly New Zealanders in secure dementia units and psychogeriatric facilities. More>>

ALSO:

Justice Reform: Andrew Little Interviewed By Corin Dann

“We’ve had thirty years of the auction of more penalties, more crime, more people in prison but it‘s not working, it’s not making us safe.” More>>

ALSO:

Greens AGM: Leadership Stands Firm On Waka Jumping Bill

The Green Party leadership have dug in their heels and will not be reversing any of the decisions they have made in government. Former MPs Jeanette Fitzsimons and Sue Bradford had hoped the caucus might be persuaded this weekend to pull its support from the waka jumping bill. More>>

ALSO:

TOP Still Going, Actually: New Leader For Opportunities Party

New leader Geoff Simmons' aim as the leader of TOP is to take the party into Parliament at the next election where it can advocate and implement progressive reform in areas including fair taxation, cannabis legalisation, affordable housing, and environmental protection. More>>

ALSO:

Gordon Campbell: On Another Reason To Loathe HR Departments (And On The Teachers Strike)

This morning’s news item about Police emergency call centre staff turning up for work while they’re sick – because they’re afraid their sick leave statistics will be used against them, and their jobs put in jeopardy – is not an isolated case... More>>

MPs' Computers To Be Searched: Inquiry Into Leak On Simon Bridges' Expenses

An inquiry has been launched to find out who leaked the National Party's expenses to the media... Parliament's speaker, Trevor Mallard, said a Queen's Counsel would lead the inquiry with the help of an employment lawyer and also someone with forensic IT skills. More>>

ALSO:

Teachers Strike: Nationwide Rallies And Marches

Teachers and principals voted for a full day strike to be held on 15 August to send a strong message to the Government that the current collective agreement offers from the Ministry of Education would not fix the crisis in teaching. More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages