Exchange differences in the first quarter of 2017

Friday, 28 April, 2017
6/2017

Due to the on-going work on preparing the consolidated financial statements of the KGHM Polska Miedź S.A. Group (hereafter: the Group) for the first quarter of 2017, the Management Board of KGHM Polska Miedź S.A. hereby announces that:

  1. in the consolidated statement of profit or loss, other operating costs were recognised due to exchange differences from the valuation of the company Future 1 Sp. z o.o.’s balances due to intra-group, USD-denominated loans, which is a consequence of the cross-border merger of Luxembourg-based subsidiaries of the Fermat group with the USD as their functional currency with the Polish (acquiring) subsidiary Future 1 Sp. z o.o. with the PLN as its functional currency, and
  2. in accordance with accounting principles regarding consolidation of the Group, exchange differences with respect to the valuation of balances  of receivables and payables in the Group in foreign currencies arise from the gross amounts i.e. excluding the allowances for impairment of receivables recognised in prior periods.

Consequently,  in the consolidated statement of profit or loss, in other operating costs due to exchange differences for the first quarter of 2017, negative unrealised exchange differences were estimated at the level of  PLN 815 million, as compared to PLN 425 million representing other operating costs due to exchange differences at the level of KGHM Polska Miedź S.A. 

This amount is an estimate and is subject to change. The final results will be presented in the consolidated quarterly report QSr 1/2017, which is expected to be published on 5 May 2017.  The aforementioned method for estimating exchange differences will be consistently applied by the Group in subsequent reporting periods.

The recognised exchange differences do not affect the liquidity of the KGHM Polska Miedź S.A. Group.

Legal basis: Art. 17 (1) of MAR (Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (Official Journal of the European Union dated 12 June 2014, no. L 173/1)