The Management Board of KGHM Polska Miedź S.A. announces that the Supervisory Board of the Company at its meeting on 31 January 2011 approved the Company’s Budget for 2011 as presented by the Management Board. The basis for preparation of the Budget were the anticipated results for 2010 and the assumptions contained in specific operating plans. A forecast of the Company results based on the accepted Budget assumptions presumes the achievement in 2011 of revenues from sales in the amount of PLN 16 067 million and profit for the period of PLN 8 345 million. A significant condition for the achievement of the forecasted profit for the period is the realisation of the sale of the blocks of shares of Polkomtel S.A. and DIALOG S.A. Following are details of the forecast assumptions:
- Electrolytic copper production of 543 thousand t
- including from purchased copper-bearing materials of 111 thousand t
- Silver production of 1 027 t
- Average annual copper price of 8 200 USD/t
- Average annual silver price of 25.00 USD/troz
- USD/PLN exchange rate of 2.80 USD/PLN
- Total unit cost of electrolytic copper production from own concentrates of 12 634 PLN/t
- Capital expenditure of PLN 1 892 million
- Equity investments of PLN 9 046 million
The level of expenditures on equity investments was set with the assumption of achieving income from the sale of telecoms assets. The most important item with respect to equity investments is the acquisition of foreign, low-cost mine assets, representing an element in the realisation of the Company’s strategic assumptions. The goal of realisation of these projects is to achieve in subsequent years an annual level of mine production of 700 thousand tonnes of copper in concentrate in the KGHM Polska Miedź S.A. Group. The capital expenditure plan assumes the continuation of tangible assets projects begun mainly with respect to: accessing the Głogów Głęboki Przemysłowy deposit, continued construction of the SW-4 shaft, the Pyrometallurgy Modernisation Program and the construction of gas-steam blocks. It must be pointed out that, given the high level of hedging of future Company revenues, the continued high volatility in metals prices and in the exchange rate has a significant effect on the change in the fair value measurement of derivative instruments at the balance sheet date and on the level of the profit for the period. Realisation of this forecast will be monitored by the Company on an on-going basis. Should there occur significant deviation from the amounts forecasted, the Company will perform an adjustment to the forecast and will publish it immediately in the form of a current report. Legal basis: § 5 sec. 1 point 25 of the Decree of the Minister of Finance dated 19 February 2009 regarding current and periodic information published by issuers of securities and conditions for recognising as equivalent information required by the laws of a non-member state (Journal of Laws from 2009 No. 33, item 259 with subsequent amendments)