WELLINGTON, New Zealand (AP) -- New Zealand's biggest coal miner announced a gaping loss Friday as it struggled against lower international coal prices and a strong local currency.
State-owned Solid Energy reported a loss of 335 million New Zealand dollars ($278 million) for the year ended June 30 after writing down assets and sacking hundreds of workers. Revenue was down 35 percent to NZ$631 million and profit excluding one-time items was down 78 percent to NZ$22 million.
A switch to low-cost natural gas by some U.S. utilities coupled with slower growth in China contributed to last year's decline in coal prices. Solid Energy exports more than half its coal, much of which is used in steel production. The company's revenue was also dented by a strong New Zealand dollar, which has been given buoyancy by a relatively healthy economy in the South Pacific nation of 4.5 million people.
Observers have also accused Solid Energy of overextending itself when coal prices were booming.
Since last year, the company has mothballed a mine and laid off at least 550 workers, which along with attrition reduced its workforce from about 1,650 to 900.
Earlier this week, the company reached an agreement in principle with the government and its lenders to restructure its debts and continue operating.
Solid Energy Chairman Mark Ford said he believes the agreement will allow the company to return to profitability in the coming years and to reinvest in its mines when the market for coal improves.
"We believe the company has a good operating future," he said in a statement, "and we hope that with the continued support of our shareholder and our funders we can re-establish the company as a major employer and economic contributor in our key coal mining regions."
The center-right New Zealand government had earmarked Solid Energy for partial sale as part of a contentious asset-sales program it hopes will raise NZ$5 billion and reduce the country's need to borrow money from abroad. However, Solid Energy's financial problems have forced the government to put plans for its sale on hold.
Coal prices are likely to rise again in the longer-term. The International Energy Agency earlier this week forecast that coal would replace natural gas as the dominant fuel for power generation in Southeast Asia over the next 20 years.