Solid Energy will defer presenting its half-year accounts until the Board of Directors is confident the accounts reflect a true and fair picture of the company’s position, says acting Chair Andy Coupe.
The Board has held its monthly meeting today. Mr Coupe says the company view is that coal prices will remain lower for longer than has been predicted and that they will not recover as quickly.
Chief executive Dan Clifford says the company continues to make good progress in reducing costs and operations are outperforming their plans, with cost of production reduced by 30% over the past 18 months. Notwithstanding that there has been some improvement in the exchange rate, current and expected coal prices mean the business will need to continue making structural change, Mr Clifford says.
“We can see an issue coming,” Mr Coupe says. “It is not about current performance or any immediate difficulty in meeting our commitments. It is about the impact on our balance sheet of future pricing for coal and our consequent diminishing ability to repay or refinance debt when it falls due from September 2016. We are acting early.”
Solid Energy’s lenders and shareholder are aware of the company’s view and management is regularly updating staff members, Mr Coupe says.