Assets write-downs of $215.3 million, coupled with $102.2 million in one-off restructuring, redundancy and closure costs, contributed to the dismal result for the 12 months to June 30.
Underlying earnings plunged 78% to $22.2 million – compared with $99.7 million in 2012.
Even though the global coal market was weak, it was a less than satisfactory trading performance, chairman Mark Ford said.
“But we do believe that Solid Energy has a good operating future now that we have focused the business on cash generation, and reduced and contained costs,” he said.
“The carrying values of our coal assets are likely to remain low for some time as we expect that international export prices will remain depressed in the short to medium term.
“The company’s financial recovery will be contingent on continuous improvement across the business coupled with an improvement in international coal markets which could take up to three years.
“The impact of change and restructuring on our employees and on regional communities throughout the year has been as severe and as far reaching as any in the company’s 100-year plus history.
“While our focus is on paying off our debt and further reducing costs through greater efficiency, we hope to be in a position to reinvest in our key coal mining regions once there is a sustained improvement in the market.”
Revenue for the year was $631.1 million, down 35%, as hard coking coal prices on the international spot market dropped and the New Zealand dollar remained high at more than 80c against the US dollar for most of the period.
Coal sales were down 11% to 4.1 million tonnes as international steel-making customers cut production in response to weaker markets.
Coal exports were down 16% on last year to 2.0Mt while sales in New Zealand were down slightly to 2.1Mt. Average US dollar prices received in the year were down 34% on the previous year.
During the year, Solid Energy restructured and closed down or was divesting its renewable energy businesses, coal development projects and surplus assets, with the loss of more than 600 jobs. The company employed 1036 permanent and fixed-term staff at the end of June.
Since year end, the company has confirmed a further 90 redundancies at Huntly East Mine. The economics of underground operations at Huntly do not justify keeping the operation going in its current form.
As of today, Solid Energy employs 902 permanent and fixed-term staff. Since June 30, 2012, 550 employees have been made redundant.
An impairment of $80.1 million was booked for Stockton mine. The company has adopted lower future price assumptions, impacting the assessment of future value.
The decision to place Spring Creek Mine into care and maintenance on October 25, 2012, as well as soft global coal markets, resulted in additional impairments of $53.1 million for the mine.
An impairment of $8.8 million was also recognised for Cobden Bridge, with the value of this leased rail bridge asset no longer fully supported by Spring Creek Mine or other near-term coal developments.
