28 Feb 2014

Solid Energy posts $41m loss

4:30 pm on 28 February 2014

The Labour Party says Solid Energy's latest result - a half-year loss of nearly $41 million - shows the company is still in a desperate financial position.

The state-owned coal company says that while the result for the second half of last year is an improvement on the equivalent six months the year before, when it had to write down $222 million worth of assets, global conditions remain challenging.

Solid Energy was originally on the Government's list of partial asset sales but had to be removed because of its financial problems. Last October the Government put in place a bailout package designed to keep it afloat for three years.

But Labour's state-owned enterprises spokesperson, Clayton Cosgrove, says this result further demonstrates that ministerial oversight has been lacking.

"Sadly," he says, "it did not have to be this way. It's interesting that 48 hours ago we had the Government waving the white flag in defeat over Genesis; 24 hours ago Tony Ryall (the State-Owned Enterprises Minister) announces his retirement; and today we have part of his legacy."

Solid Energy's interim chief executive, Garry Diack, says the price of coal is the lowest it has been since 2007 and while the indications are that prices will pick up again, that's a long way off yet - perhaps 18 months away. "Essentially," he says, "we're just hunkering down for long hard market conditions."