Published: 12:13PM Friday August 31, 2012 Source: ONE News
Solid Energy has reported a significant after-tax loss just days after announcing up to one third of its work force could be laid off.?
Executives and the chairman, John Palmer,?today announced the declining health of their once booming company.
"It remains clearly subject to the commodity cycle that we are very familiar with and that is in difficult times," he said.
Solid Energy's made an after-tax loss of $40.2 million.?
However the company has announced earnings of almost $99.7 million, up 16% on last year.
The loss was caused by a massive writedown of assets, including its bio-diesel business, losses in value from work at its Spring Creek coal mine on the West Coast and from the reduction in work at its Huntly East site in Waikato.
"It has been increasingly volatile for the last few years, but in early July it took a massive dive off a cliff," said Don Elder, Solid Energy CEO.
That dive included a significant drop in the coal commodity price and softening demand from China.
Solid Energy is planning to cut its capital expenditure by $100 million over the next financial year. That's in addition to dealing with what are expected to be significant redundancies.
Solid Energy says the current economic climate means hundreds of jobs could go.? But no final decision has been made.
"Nobody except yourselves feels the pain of what you're going through more than the people who sit around the board table and the management team in Solid Energy," Palmer told staff.
The miners union says Solid Energy is being short-sighted and focused on the partial sale of state assets.
"It's designed to please the asset sale float rather than the long-term prospects of the company and in particular the job prospects of working New Zealanders," said Ged O'Connell EPMU assistant national secretary.
Solid Energy describes current conditions as worse than the 2008 financial crisis.?
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Source: http://tvnz.co.nz/business-news/solid-energy-reports-40m-loss-jobs-line-5054854?ref=rss
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