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

Gordon Campbell: On The Peters/Ardern Triumph

There are a lot of good reasons to feel joyful about this outcome. It is what so many young voters – the best hope for the country’s future – wanted.

Far more important than the implications for the Economy Gods ( is the dollar up or down? ) last night’s outcome will also mean many, many vulnerable New Zealanders will have a better life over the next three years at least.

Yet the desire for change was in the majority, across the country..>>>More


Reaction

Labour on its agreement |Peters: Post-Election Announcement Speech | Greenpeace “cautiously hopeful” about new Government | ACT - Madman on the loose | E tū ecstatic | Chamber welcomes the outcome | Greens on their joining Govt | EDS welcomes new govt | Immigrant groups worry | Feds ready to engage new coalition government | Labour Ministers of the Crown announced

 

Climate: Increasing Greenhouse Emissions Hit NZ

New Zealand is seeing impacts of excess greenhouse gas emissions in our climate and oceans, according to the latest national report from the Ministry for the Environment and Stats NZ about the state of the atmosphere and climate…More>>

ALSO:


Wellington.Scoop: Arrests At Blockade Of "Weapons Expo"

“We encourage people in Wellington to get down to the Westpac Stadium now for a day of awesome peace action. There will be plenty of food, music and activities to keep us sustained through the day.” More>>

ALSO:

Rorschach Restructuring: PSA Taking Inland Revenue To Court Over Psychometrics

The Public Service Association will be seeing Inland Revenue in Employment Court over its intention to psychometrically test employees reapplying for their roles at the department as part of its controversial Business Transformation restructuring plan. More>>

ALSO:

Nuclear Disarmament: Nobel Peace Prize 2017 Awarded To ICAN

Congratulations from iCAN Aotearoa New Zealand to international iCAN, the other iCAN national campaigns and partner organisations, and the countless organisations and individuals who have worked so hard for a nuclear weapons-free world since 1945. More>>

ALSO:

Expenses: Waikato DHB CEO Resigns

An independent inquiry has identified that Dr Murray had spent more than the agreed $25K allocated for relocation costs, and other unauthorized expenses involving potential financial breaches of the chief executive’s obligations. More>>

ALSO:

Wellington.Scoop: Sad About The Trolley Buses?

The Regional Council’s MetLink is today spending money to tell us that it really loves Wellington’s trolley buses, even though they’re all being taken off our roads by the end of this month. More>>

ALSO:

Post-Election: Preliminary Coalition Talks Begin

New Zealand First will hold post-election preliminary discussions in Wellington with the National Party tomorrow morning and the Labour Party tomorrow afternoon. More>>

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election