The best operating and financial results in nearly a decade, a substantial decrease in debt, a recommended dividend payout and a new concession, as well as top-tier silver production in world rankings: KGHM announced a summary of the work of the copper company in the first quarter of 2021. The company also published the Integrated Report of KGHM for 2020.
“We are proud of the results of our work. Especially now, when we are commemorating the 60th anniversary of KGHM’s founding. The strategic significance of copper, as a raw material needed in electromobility, renewable energy, electronics and medicine, has a long term outlook. This can also be seen in our results for the first quarter. I wish to emphasise that we are achieving these effects under the conditions imposed by the COVID-19 epidemic, when many sectors of the economy have suffered from the impact of lockdowns. KGHM is consistently enhancing its position as a global champion,” said Marcin Chludziński, President of the Management Board of KGHM Polska Miedź S.A.
In the first quarter of this year, KGHM recorded its highest consolidated and standalone operating profit since the acquisition of the Group’s international assets in 2012. The company also achieved its highest quarterly consolidated EBITDA margin to date, at 34 percent.
Consolidated adjusted Group EBITDA for the first quarter amounted to PLN 2 608 million, or an increase of 2.3x compared to Q1 2020. Standalone quarterly EBITDA rose by 86 percent compared to Q1 2020 and amounted to PLN 1 675 million.
Worth noting is that EBITDA for the Sierra Gorda mine increased more than six-fold, reaching PLN 643 million as KGHM’s share.
This substantial improvement in EBITDA enabled the KGHM Group to record a profit for the period which was PLN 675 million (+98%) higher than that achieved in Q1 2020 and closed the quarter in the amount of PLN 1 365 million. Such a level of quarterly net profit is the highest since the acquisition of the international assets. The same is the case in terms of profit for the period of KGHM Polska Miedź S.A. (PLN 975 million).
The increase in Group revenues for the quarter by 27 percent compared to the first quarter of 2020, to PLN 6 745 million, was due to the increase in the prices of basic products. This was despite an adjustment in revenues due to derivatives and a less favourable USD/PLN exchange rate.
Invaluable raw materials
The price of copper in the first quarter of 2021 continued to rise, reaching the levels from 2011. Silver prices remained above 25 USD/koz t. As a result of the economic recovery there was improved sentiment towards these commodities, with stabilisation of the gold/silver ratio at historic averages.
The increase in copper production by the KGHM Group by 6.6% versus Q1 2020, with production in the first quarter of 186 thousand tonnes, was due to the greater availability of feed material and improved availability of production lines, as well as higher recoveries and better ore quality. In the Polish operating segment there was improvement in mining parameters in the Deep Głogów area.
The basic operating costs of KGHM Polska Miedź S.A. were higher by 16.6 percent versus the corresponding prior period of 2020, mainly due to higher sales of copper products through the use of a higher amount of purchased metal-bearing materials.
Because of the increase in the amount of the minerals extraction tax paid, there was an increase in C1 cost in KGHM Polska Miedź (C1 excluding this tax was lower by 12.6%, mainly due to the higher valuation of by-products, i.e. silver and gold). In turn, the decrease in C1 recorded by Sierra Gorda of 19 percent compared to the prior year was due to higher revenues from the sale of associated metals, as well as to higher production and sales of copper.
In the first months of 2021 the KGHM Group presented solid operating cash flows and a financing structure based on long-term instruments. During this time the debt indicator, measured as the relation of net debt to EBITDA, fell to 0.8 from 1.7 at the end of the first quarter of 2020 and from 0.9 at the end of 2020.
Equity of KGHM as at 31 March 2021 amounted to PLN 21 491 million, or an increase of PLN 410 million compared to the end of 2020.
Following reviews of the current financial capabilities of the Company (taking into consideration the investment program and the current situation on the metals market), the Management Board of KGHM submitted its proposal to the General Meeting regarding the allocation of profit for 2020. The resolution included the proposal that the amount of PLN 300 million be allocated to a dividend for shareholders, or PLN 1.50 per share.
President Marcin Chludziński summed up the quarter by saying that by advancing the Strategy the Company was able to maintain production in its domestic and international assets as well as keep costs under control. „This guarantees financial security for the company, while ensuring safe working conditions and minimising our impact on the environment and our surroundings. We act in compliance with the idea of sustainable development,” added Marcin Chludziński.
In the first quarter of 2021 the decision was made to define and create Strategic Programs for KGHM. In 2021 the company will continue to improve its production parameters, stabilise its finances and achieve ambitious investments. Especially given that at the end of April the Minister for Climate and the Environment issued a decision granting KGHM concessions for the Bytom Odrzański and Kulów – Luboszyce deposits.
The copper giant is planning further projects aimed at minimising the Company’s impact on its environment. We are continuing the Program to adapt the technological installations of KGHM to the requirements of BAT conclusions for the non-ferrous metals industry together with the restriction of arsenic emissions (BATAs). 11 projects were advanced at the Głogów Copper Smelter and Refinery and the Legnica Copper Smelter and Refinery, of which in the first quarter of 2021 realisation of the following was completed:
- A de-leaded slag transport installation (HM Głogów)
- A warehouse and storage area for lead-bearing materials (HM Głogów)
KGHM is continuing its sanitary regimes and other restrictions related to the COVID–19 pandemic. The vaccination of company employees is well underway.
i Adjusted EBITDA including 55% of EBITDA in Sierra Gorda, which is consolidated by using the equity method.
|in mn PLN||1st quarter |
|1st quarter |
in mn PLN
|Revenue||6 745||5 299||+1 446||+27%|
|Cost of goods sold||5 303||4 804||+499||+10%|
|Adjusted EBITDA||1 442||495||+947||+191%|
|Net result on sales||2 608||1 129||+1 479||+131%|
|Profit for the period||1 365||+690||+675||+98%|
In accordance with the company's informational policy, since 2014 KGHM Polska Miedź S.A. has not published financial forecasts.
Higher payable copper production by the KGHM Polska Miedź S.A. Group (+1%, 174 thousand tonnes), higher silver production (+3%, 335 tonnes) and 25% higher profit by the KGHM Group in the first quarter of 2020 compared to Q1 2019
The consolidated net profit of KGHM of PLN 690 million is one of the highest in recent quarters. The KGHM Group recorded lower revenues (-3%, PLN 5 299 million) and EBITDA (-22%, PLN 1 129 million) with a higher profit for the period (+25%, PLN 690 million).
The revenues of the KGHM Group in the first quarter of 2020 amounted to PLN 5 299 million and were lower by PLN 189 million (-22%) than in the corresponding prior year period. The lower revenues recorded by all segments were mainly due to less favourable macroeconomic conditions. The sales revenues of KGHM Polska Miedź S.A. amounted to PLN 4 225 million and were lower by PLN 91 million (-2%) than in the corresponding prior year period. The decrease in the revenues of the parent Entity were due to lower copper prices alongside a more favourable USD/PLN exchange rate and a higher volume of silver and gold sales. The fall in the copper price by more than 9%, was slightly offset by a higher silver price (+8.5%). The average copper price in the first quarter amounted to 5 637 USD/tonne, silver 16.91 USD/koz t. The strengthening of the USD versus the PLN was not as strong as in the prior year.
Adjusted EBITDA for the KGHM Group was lower in the following segments: KGHM Polska Miedź S.A. (-PLN 99 million, -10%), KGHM International (-PLN 118 million, -69%) and Sierra Gorda (-PLN 114 million, -52%).
High EBITDA, record results by Sierra Gorda and production maintained despite the crisis caused by the COVID-19 pandemic – these are the main achievements of the KGHM Polska Miedź S.A. Group in the second quarter of 2020
Adjusted Group EBITDA in the second quarter of 2020 was a record PLN 1 522 million (higher by PLN 244 million, +19% q/q). The last time such a high result was achieved was in the first quarter of 2017, after a rapid rise in the copper price. The Group’s results were mainly supported by those of KGHM Polska Miedź S.A., which earned EBITDA of PLN 1 031 million. Sierra Gorda also recorded a high EBITDA (of PLN 324 million), nearly 150% that recorded in Q2 2019, the highest such result in the history of this mine. The only exception was KGHM International, which showed a 34% weaker EBITDA (PLN 110 million), though it was nearly twice as high as compared to the first quarter of 2020.
Consolidated net profit of the KGHM Group in Q2 2020 amounted to PLN 9 million, or a decrease by PLN 409 million compared to the second quarter of 2019. The change was mainly due to exchange differences (-PLN 237 million) and to a higher loss on the measurement of joint ventures accounted for using the equity method (-PLN 147 million).
Production by the KGHM Group, against the backdrop of the COVID-19 pandemic, remained at similar levels. Copper production amounted to 177 thousand tonnes, (or -1% vs Q2 2019), while 373 tonnes of silver was produced (-4% vs Q2 2019, higher by 11% after a weak first quarter of the current year).
The C1 cost of concentrate production in the Group was 1.58 USD/lb, or lower by 12% compared to the second quarter of the prior year, in the case of KGHM Polska Miedź S.A. mainly thanks to a weaker PLN vs the USD and a lower minerals extraction tax, and in the case of Sierra Gorda due to lower operating costs, alongside an increase in the copper sales volume.
Sales revenues earned by the KGHM Group in the second quarter of 2020 amounted to PLN 5 649 million and were lower by PLN 91 million (-2%) compared to the corresponding prior-year period. The decrease in revenues in all segments was mainly the result of less favourable macroeconomic conditions. Sales revenues earned by KGHM Polska Miedź S.A. in the second quarter of 2020 amounted to PLN 4 672 million and were higher by PLN 157 million (+3%) than in the corresponding period of 2019. The higher revenues earned by the Parent Entity were due to a more favourable USD/PLN exchange rate (+6%) and to higher prices of silver (+9%) and gold (+26%). The decrease in the copper price in the second quarter of 2020 by more than 12% compared to the corresponding prior-year period was slightly offset by the increase in the price of silver (+10%). The average price of copper in the second quarter of 2020 amounted to 5 356 USD/tonne and of silver, 16.38 USD/koz t. In the second quarter of 2020 the average USD exchange rate was stronger than in the prior year (4.0966 USD/PLN vs 3.8119 USD/PLN).
Adjusted EBITDA for the KGHM Group was higher in the segments KGHM Polska Miedź S.A. (+PLN 111 million, +12%), and Sierra Gorda (+PLN 193 million, +147%), while EBITDA recorded by KGHM International was lower (-PLN 56 million, -34%).
A third quarter with good effects – KGHM presents its financial results for the first nine months of 2020
KGHM Polska Miedź S.A. has presented its financial results for the third quarter of 2020. Thanks to the Management Board’s adopted strategy, consistent decisions and flexibility, the KGHM Group achieved a record level of EBITDA and maintained the full capacity to operate its assets despite the pandemic. KGHM has reported stable production while maintaining the maximum level of safety and cost discipline.
“We are reporting the effects of 9 months of strenuous work. A rather tough period for the company and connected of course with the coronavirus pandemic, something the entire world is dealing with. But there is good information: we have made it through this time quite well, considering the demanding circumstances. We ended the quarter with a record EBITDA, at both the Group level, the international assets and in Poland. The results speak for themselves. Ahead of us are more months of operating under a pandemic threat, but KGHM is doing a great job. Mainly thanks to the commitment of our staff and our deep feeling of responsibility for the Company,” says Marcin Chludziński, President of the Management Board of KGHM Polska Miedź S.A.
Solid financial results
The increase in Group EBITDA by PLN 306 million to the record level of PLN 4 418 million was mainly in respect of KGHM Polska Miedź S.A. (+PLN 184 million; +6%) and Sierra Gorda (+PLN 257 million; +49%). The increase was due among others to the following factors: higher revenues by KGHM Polska Miedź S.A. due to an increase of PLN 160 million resulting from the adjustment by hedging transactions, a more favourable USD/PLN exchange rate (+3%) and higher prices of silver (+22%) and gold (+27%) while maintaining cost discipline.
KGHM Polska Miedź S.A. achieved revenues in the first three quarters of 2020 of PLN 13 360 million, meaning a 2% increase versus the period prior to the epidemic (the first three quarters of 2019). Also higher was EBITDA, rising from PLN 2 868 million to PLN 3 052 million after the first nine months of 2020. What is important is that both the level of revenues as well as EBITDA achieved exceeded the amounts set forth in the budget for this period.
The Group’s main source of operating income was the results of KGHM Polska Miedź S.A., which increased EBITDA Q3/Q3 by 18%. Sierra Gorda’s EBITDA doubled compared to the third quarter of 2019, the highest result yet achieved by this mine. Likewise KGHM INTERNATIONAL recorded a 30% higher EBITDA compared to the third quarter of 2019.
The decrease in consolidated profit by PLN 494 million (-30%) was mainly due to a decrease in the operating result by PLN 122 million, a decrease in the result on exchange differences by PLN 218 million and a lower result on the realisation and measurement of derivatives by PLN 137 million.
The KGHM Group reports another quarter in which its financial situation is stable and safe. Net debt of the Group fell in the first 9 months of 2020 from PLN 478 million to PLN 6 413 million.
Payable copper production by the Group was slightly lower than in the first three quarters of 2019 and amounted to 521 thousand tonnes. The lower production of copper by KGHM Polska Miedź S.A. was due to the restricted supply of copper scrap in the first half of the year and to the maintenance shutdown at the Głogów I Copper Smelter and Refinery. The decrease in copper production by KGHM INTERNATIONAL was due to lower production in the Sudbury Basin, mainly due to the suspension of operations by the Morrison mine after the first quarter of 2019, and to lower production by the Robinson and Franke mines due to the processing of lower quality ore (a transition zone in Robinson, higher carbonates content in Franke).
On the other hand, copper production by the Sierra Gorda mine increased by 35% due to extracting ore with higher copper content as well as higher extraction. It is worth mentioning that in comparison to the first three quarters of 2019 there was an increase in the efficiency of utilisation of production machinery at Sierra Gorda, the result of preventative actions undertaken to minimise the number of breakdowns, and as a result unplanned maintenance shutdowns.
Other metals (including silver) also recorded lower volumes, mainly due to the maintenance shutdown at the Głogów I Copper Smelter and Refinery: silver lower by -3% (from 1031 t to 997 t in the first 9M of 2020), TPM lower by -8% (from 157 koz t to 145 koz t in the first three quarters of 2020) and molybdenum by -17% (from 8.8 mn lbs to 7.3 mn lbs in the first three quarters of 2020, mainly due to lower production by Sierra Gorda (the mining of ore with lower molybdenum content, lower recovery).
Since the start of the pandemic at the turn of February and March 2020, there have been no production shutdowns directly related to the pandemic in either KGHM Polska Miedź S.A. or in the Group’s international mines.
Since the start of the second quarter of 2020, copper prices have risen and as a result, the average price for the first three quarters of 2020 amounted to 22 931 PLN/t, or a level slightly lower than that recorded in the corresponding period of 2019 (23 115 PLN/t). Silver and gold prices were also favourable, which given the uncertain economic situation increased compared to the prior year period respectively by 24% and 31% (in PLN).
The impact of the fall in metals prices in the initial months of 2020 was to a large degree offset by the weakening in the PLN and to a consistently implemented hedging policy. The Company is consistently advancing its strategy, which foresees the continuation of stable production by the domestic and international assets and a level of costs guaranteeing financial security and safe workplace conditions.
The copper giant in the age of COVID-19
KGHM is continuously taking actions aimed at ensuring the safety of its employees. The discipline exercised by the staff and the consistent monitoring of threats along with the implementation of procedures to prevent infections has enabled KGHM to maintain the full capacity to continue its operations. The Company has instituted numerous educational and informational campaigns, has provided employees with access to special infolines as well as psychological support for persons in isolation, with the cooperation of medical staff from the hospital MCZ.
The Company is supporting the fight against COVID-19 in cooperation with state institutions. KGHM has joined the government program Solidarnościowy Korpus Pomocy Seniorom (Senior Citizens Solidarity Corps). The Company, with the support of volunteers, regional Social Welfare Centers, Caritas and local NGOs, has prepared action plans to enhance the safety of senior citizens. KGHM among others is providing packages with safety materials, including disinfectants, to persons in need.
Additionally, KGHM is also assisting in the organisation of additional beds in temporary hospitals for patients ill with the coronavirus in Lower Silesia. The regional base is increasing by more than 200 beds in Lubin, Legnica and Wałbrzych.
We are advancing our capital expenditures pursuant with our targets. By the end of the third quarter of 2020 we had achieved 71% of planned expenditures. The largest share in the structure of expenditures incurred was held by the Deposit Access Program and by the development of the Southern Quarter of the Żelazny Most Tailings Storage Facility. Other investment goals comprise among others the outfitting of the mines, adapting production and related installations to the requirements of BAT Conclusions, exploration of the orebody in Poland and the modernisation of IT systems in the Company as part of the KGHM 4.0 Program.
Of increasing importance for the Company’s operations are investments related to renewable energy sources (RES). Our efforts to reduce CO2 emissions and to increase the predictability of energy costs mean that investments such as our projects related to solar energy will be of crucial importance for the Company and are consistent with our Strategy for the years 2019-2023.
KGHM in the near future is facing the consistent advancement of its optimisation and savings programs throughout the Group. KGHM will conduct a rational and responsible investment program, will advance its deposit access program in the Company’s concessioned areas and also its Energy Development Program.
Record operating result and solid financial results – KGHM Polska Miedź S.A. announces the highlights of 2020
KGHM Polska Miedź S.A. announced the financial results of the Company and Group for 2020. The copper giant proudly announced the highest Group operating profit since the acquisition of the international assets. EBITDA of more than PLN 6.6 billion, or 27 percent higher than in the prior year. The Company maintained the full operational ability of its assets.
KGHM recorded very good sales results for the Group. They amounted to a 4 percent rise in revenues year-on-year, to PLN 23.6 billion. The affect of last year’s managerial actions can also be seen in the safety and continued employment of thousands of staff, optimised costs and a substantial decrease in debt.
“Despite the unprecedented scale of volatility in the environment, the Group’s operations were not threatened at any stage. This makes us extremely proud. It required the hard work and commitment of our entire workforce. We successfully advanced the Company’s Strategy, which calls for a stable level of production both domestically and abroad. Of importance were decisions guaranteeing safe financing and assuring appropriate working conditions. And all this in accordance with the idea of sustainable development,” said Marcin Chludziński, President of the Management Board of KGHM Polska Miedź S.A.
Stable production in KGHM
From the outbreak of the pandemic, there were no production stoppages either in KGHM Polska Miedź S.A. or in any of the Group’s international mines. In the segments KGHM INTERNATIONAL LTD. and KGHM Polska Miedź S.A. payable copper production was slightly lower, respectively by 9.6 thousand tonnes and 5.2 thousand tonnes.
The lower production recorded by KGHM Polska Miedź S.A. was due to the lower quality and thickness of the mined deposit, as well as to the restricted supply of copper scrap in the first half of 2020 and the planned maintenance shutdown at the Głogów I Copper Smelter and Refinery.
Production of payable copper by KGHM INTERNATIONAL LTD. was lower than planned by 4.8 thousand tonnes (-7%) due to lower production by the Franke mine and the Sudbury Basin mines. Precious metals production was however higher than planned by 3.3 thousand tonnes (+5%) as a result of higher production of these metals by the Robinson mine and by the Sudbury Basin mines.
Sierra Gorda ended 2020 with payable copper production of 3.0 thousand tonnes (+4%) higher than assumed in the budget, as a result of higher ore throughput and higher copper recovery.
Solid financial results by KGHM
In 2020 the KGHM Group recorded an increase in copper production to 709 thousand tonnes. This was achieved with a C1 cost of 1.59 USD/lb. The increase was driven by the 37 percent higher result of the segment Sierra Gorda S.C.M. (+22.3 thousand tonnes for the 55% interest), mainly the result of higher ore throuput and higher copper content.
In 2020, work continued at Sierra Gorda on enhancing asset utilisation efficiencies as well as on increasing production capacity.
In accordance with the obligation arising from the Strategy involving the optimisation of costs in the Group, to a large extent we succeeded in offsetting cost inflation. The basic operating costs of KGHM’s Divisions in Poland were substantially impacted by the utilisation of inventories. This led to a higher sales volume. Total expenses by nature in 2020 compared to 2019 were higher by 3 percent, mainly due to the higher utilisation of purchased metal-bearing materials and to a higher minerals extraction tax charge.
In 2020 the KGHM Polska Miedź S.A. Group was fully capable of meeting its borrowing obligations. Cash and cash equivalents in 2020 increased by PLN 1 506 million and as at 31 December 2020 amounted to PLN 2 522 million.
At the end of 2020 the debt ratio, measured as the relationship of net debt to EBITDA, decreased to 0.9 from 1.5 at the end of the prior year. Assets in the consolidated statement of financial position amounted to PLN 42 780 million and were higher compared to the amount as at 31 December 2019 by PLN 3 371 million.
Equity of KGHM as at 31 December 2020 amounted to PLN 21 081 million and was higher by PLN 879 million than at the end of 2019. In turn the net profit of PLN 1 797 million was higher by 26.5 percent than a year ago.
Safety in KGHM
In 2020 the KGHM Group recorded a record low level of the LTIRFKGHM (Lost Time Injury Frequency Rate KGHM) ratio. It amounted to 7.3, meaning a drop by 29 percent compared to 2019 and as much as 61 percent compared to 2010. So too, KGHM INTERNATIONAL LTD. in 2020, despite the exceptionally tough conditions imposed by the pandemic, recorded its best result in history in terms of occupational health and safety.
KGHM is not slowing down
The copper company is continuing the Deposit Access Program, including work on the sinking of the GG-1 Deep Głogów shaft. The strategic investment in the Southern Quarter of the Żelazny Most Tailings Storage Facility is well on track. In metallurgy the company is advancing investment projects involving the modernisation and optimisation of the Głogów I Copper Smelter and Refinery.
Projects involving protecting the natural environment and reducing the Company’s impact thereon occupy an extremely important place in KGHM. At the Legnica and Głogów metallurgical plants actions were advanced to adapt the facilities to BAT conclusions. The new Gases Treatment Installation at the Legnica Copper Smelter and Refinery, construction of which commenced in 2020, is aimed at reducing total residual emissions by 99 percent.
Last year, KGHM also advanced projects related to energy generation, including renewables (RES). At the end of 2020, 22.42 percent of total energy consumption by KGHM came from our own generation sources, including generation from our gas-steam blocks.
As part of the Energy Generation Development Program a spatial management plan was adopted which foresees an increase in installed capacity in two photovoltaic power plant projects. These power plants are arising on the terrain of KGHM. In December of 2020 KGHM ZANAM brought on-line the first photovoltaic power plant in Poland using 4.0. technology.
Our investment and development plans for 2021 are compliant with the current and consistently-advanced Company Strategy. The projects were included in the ambitious published budget of KGHM. In 2021 KGHM expects to maintain stable economic and financial results and a safe level of debt.
KGHM in the fight with the pandemic
KGHM is continuously taking actions to ensure the safety of our employees. The Company introduced rigorous procedures related to the sanitary regime, and is working under the assumption of a gradual return to normalcy in line with progress in the vaccination program. KGHM is engaged in numerous educational and informational campaigns for employees, and complies with the guidance of the Ministry of Health.
The Company supports the fight against COVID–19 in cooperation with governmental institutions. KGHM has joined among others the Senior Solidarity Corps program. The copper giant is providing organisational assistance in the creation of additional places in the temporary hospitals for patients suffering from the coronavirus in Lower Silesia. Special units were set up in Wałbrzych and Legnica. In the MCZ health center in Lubin there is also a COVID–19 unit.
Auxilliary materials to the 2020 annual report in PDF format:
Record quarterly production of copper and the highest EBITDA
142 thousand tonnes of payable copper were produced by KGHM Polska Miedź S.A. in the first quarter of 2019. This is the best quarterly result in the last 3 years, while production increased by 28 percent as compared to the first quarter of 2018. In turn, PLN 1 454 million is the highest quarterly EBITDA earned by the Group since the start of 2018. The Group exceeded its production plans for the most important commodities.
In the first quarter of 2019 electrolytic copper production by the KGHM Group increased by 21 percent to 173 thousand tonnes. The Group also achieved excellent results in terms of the production of metallic silver and of other precious metals. It also recorded a substantial increase in sales revenues. The increase in revenues by PLN 1.2 billion from all of the Group’s segments was mainly due to a higher volume of sales of copper and silver as well as a more favourable exchange rate.
The greatest impact on the Group’s net profit was mainly due to an improvement in the operating result and exchange differences by PLN 113 million.
“The best EBITDA by the Group in a year, the best production results by KGHM Polska Miedź S.A. in 3 years, and finally the higher net profit are the result of the consistent implementation of the Strategy of KGHM which was adopted last year. We have now seen another quarter in which the positive effects of stabilised production and improved profitability were evident,” says Marcin Chludziński, President of the Management Board of KGHM Polska Miedź S.A. “We are happy with the drop in the C1 cost. New projects, including the introduction of the procurement policy, allow us to reduce our costs.”
The higher electrolytic copper production by KGHM Polska Miedź S.A. was due to the higher availability of equipment. In 2018 the Company had been preparing for a maintenance shutdown by the Głogów II smelter and had to build up anode copper inventories to ensure the ability to produce electrolytic copper during the planned break.
Production of electrolytic copper and metallic silver was higher than in the comparable prior-year period, thanks to the start-up of the copper concentrate roasting installation as well as to the processing of stored, own concentrate inventories. This new investment increased the availability of our metallurgical installations. The lower extraction of ore meanwhile was the result of the tremor which occurred on 29 January in the Rudna mine. Production of copper in concentrate was slightly lower than in the first 3 months of 2018.
In the first quarter of 2019, Sierra Gorda S.C.M. produced 26.8 thousand tonnes of copper and 5.5 million pounds of molybdenum, which compared to the same period in 2018 means higher copper production by 23 percent and lower molybdenum production by 24 percent. The higher production of payable copper production by Sierra Gorda was due to higher extraction and ore processing.
„Sierra Gorda exceeded its production targets. Our efforts at optimising the operation, mainly management-related changes, are achieving results: C1 cost has come down and production is up. We have excellent relations with our Japanese partners and with the Chilean authorities. All of this allows us to look with optimism on our investment in Sierra Gorda,” says Paweł Gruza, Vice President of the Management Board of KGHM for International Assets.
The decrease in molybdenum production by 1.7 million pounds was due to the nature of the deposit and to the planned extraction sequence. This assumes the mining of a zone with a lower molybdenum grade compared to the ore extracted in prior years. Consequently, despite the increase in the amount of ore processed and the increase in molybdenum recovery, production of payable molybdenum was lower. The Company also decreased the unit cost of copper production (C1). The drop in C1 was achieved despite the limitations in extracting molybdenum, and at the same time lower revenues from the sale of associated metals.
Advancement of strategic projects
In the first quarter of 2019 implementation commenced on the Strategy of KGHM Polska Miedź S.A. for the years 2019-2023. The Company is advancing its target programs and strategic projects in individual areas of the Strategy.
In terms of improving the efficiency of the core production lines in the Polish divisions of KGHM, work continues on advancing projects aimed at automating production in the mining divisions. The Company is advancing tasks aimed at reducing energy use, in accordance with the Energy Management system in place in the Company. Work was also completed on basic tasks under projects related to adapting technical infrastructure to the changes in metallurgical technology at the Głogów I Copper Smelter and Refinery.
At the Legnica Copper Smelter and Refinery, work is approaching completion on the RCR (copper scrap processing) furnace, casting machinery and the dedusting installation. Functionality tests were carried out on individual elements of the RCR furnace, which are planned for completion in May 2019, followed by the start-up of the RCR furnace in the second quarter of 2019. Moreover, in both of these metallurgical facilities a program is being advanced to adapt the technological installations of KGHM to the requirements of BAT Conclusions for the nonferrous metals industry and to restrict emissions of arsenic (BATAs).
Work continues on building the Southern Quarter of the of the Żelazny Most Tailings Storage Facility as well as the GG-1 shaft. As respects the Deposit Access Program, preparatory work continues to build the GG-2 shaft.
At Sierra Gorda, work continues aimed at optimising and increasing the processing of the sulphide ore.
In terms of finance, in the first quarter of 2019 the financial condition of domestic subsidiaries was subjected to detailed analysis as well as the effectiveness of the trade finance tools. KGHM is endeavouring to improve the Company’s current liquidity and to hedge against transactional risks. A model was prepared which describes the impact of factoring of receivables and factoring of payables on the cash conversion cycle ratio and debt ratios. The receivables factoring program is being expanded in the Company and debt factoring has been introduced. KGHM has also announced the intention to issue corporate bonds of up to PLN 2 billion in 2019.
KGHM: solid growth despite a challenging macroeconomic environment
The KGHM Polska Miedź S.A. Group enjoyed another set of record copper production and financial results. In the first half of 2019 the Group earned a profit of PLN 970 million, or 59 percent more than in the corresponding period of 2018. One of the observable trends is the consistent rise in production by the Group, including in the Chilean asset Sierra Gorda. In the second quarter of 2019 alone, production of payable copper by KGHM Polska Miedź S.A. was nearly 145 thousand tonnes. This was the best quarterly result since the third quarter of 2015. As compared to the second quarter of 2018 production rose by 24%.
The high net profit earned by the KGHM Group accompanies record revenues of PLN 11.2 billion and outstanding EBITDA, which reached PLN 2.7 billion. During the same period of 2018, revenues amounted to PLN 9.4 billion with EBITDA of PLN 2.6 billion. This means an increase year-over-year in EBITDA of 7 percent and higher revenues by 19 percent.
The substantially better production and financial results compared to the corresponding period of 2018 were achieved despite the challenging macroeconomic environment.
“We are consistently advancing our strategy, based on excellent management and efficient operations. This leads to excellent results. The published data clearly show that we have done a good job of assessing trends and, quarter by quarter, we are building a stronger position for our company, not only for the present but for years to come,” says Marcin Chludziński, President of the Management Board of KGHM Polska Miedź S.A.
In the first six months of this year the Group earned a net profit higher by PLN 359 million than in the first half of 2018, while its revenues increased by PLN 1.8 billion. Such a positive dynamic was achieved despite a drop of around 11 percent in the average annual copper price.
In the first half of 2019 KGHM also issued corporate bonds, successfully placing PLN 2 billion on the market.
“The achievement of an impressive consolidated net profit, in the amount of PLN 970 million and a substantial increase in revenues and EBITDA by the Group, are related to the higher copper and silver sales and to a favourable exchange rate for these metals, which was strong enough to minimise the lower metals prices over the last six months,” says Katarzyna Kreczmańska-Gigol, Vice President of the Management Board and CFO of KGHM Polska Miedź S.A.
More copper and silver and cheaper concentrates
The good financial results are related to better production than in 2018. The company produced more electrolytic copper in its assets in Poland and more payable copper in its Chilean mine Sierra Gorda. The Group also recorded a drop in the C1 cash cost of producing copper concentrate.
In the first half of 2019 the Group produced a total of 352 thousand tonnes of payable copper, or 19 percent more than in the corresponding period of last year. The plan for electrolytic copper production was exceeded by producing 287 thousand tonnes, due to improved availability of production equipment.
“The high metals production was achieved despite the ambitious investments program carried out at the same time, which partially slowed work by our metallurgical plants processing copper concentrate. At the Legnica Smelter and Refinery the long-anticipated RCR furnace was commissioned, while the Głogów II Smelter and Refinery underwent an extensive 3-month maintenance shutdown,” explains Radosław Stach, Vice President of the Management Board (Production).
Amongst the data for the first half of this year, note should be made of the 47 percent rise in silver production (713 tonnes), versus the corresponding period of the prior year (485 tonnes).
The Chilean mine Sierra Gorda in the past half year recorded a stable increase in payable copper production. This is the result of efforts at reorganising the mine’s operations, which enabled a systematic increase in ore extraction and processing. The increase in mining by Sierra Gorda was also a cause of the increase in the production of precious metals, including silver and gold. The drop in molybdenum production was due to mining in areas with lower molybdenum content as compared to ore extracted in prior years. Production of copper in concentrate by Sierra Gorda in the first half of this year amounted to 53.2 thousand tonnes and molybdenum over 10 million pounds.
“Optimalisation of the operation of Sierra Gorda’s processing plant enables the gradual increase in ore processing and a more efficient production process. Our efforts are aimed at maximising the value of the existing mine infrastructure," says Paweł Gruza, Vice President of the Management Board (International Assets).
In the first half of this year the company recorded a drop in production by KGHM INTERNATIONAL, caused by lower production from the Morrison mine, and temporarily from the Robinson mine, which was not offset by higher production by the Carlota and Franke mines. Good information included substantially higher silver production by the Sudbury Basin versus the same period of 2018, due to mining in a different area of higher mineralisation in the McCreedy mine.
Consistent advancement of strategic investments
The uncertain macroeconomic environment has required the company to adhere to strict discipline as regards the advancement of its adopted strategy under the 4.0. Program. Among others it calls for the rational management of the resources of the Polish copper basin (a.k.a. LGOM), optimisation of metallurgical production, the gradual automisation of production lines and the implementation of programs to cut energy consumption. The company is also continuing programs such as BATAs, improving organisational health and safety and a closed-circuit management project.
During the first 6 months of 2019 the Group spent over PLN 1.6 billion on investments. Among others, KGHM commissioned the largest investment in the history of the Legnica Copper Smelter and Refinery – the RCR copper scrap processing furnace. All of our development projects are proceeding on plan.
In terms of implementation of the strategy, in the first half of 2019, the company concentrated on the process of decomposing its strategic assumptions, representing the basis for operationalisation of the strategy. Simultaneously to this operationalisation process, the company engaged in activities which are critical for its functioning and development. Projects of a strategic nature were continued, the completion of which are a priority for the company. Advancement of the strategic directions of development of the KGHM Group proceeded smoothly, ensuring the continued advancement of strategic goals.
KGHM with higher production, rising EBITDA and net profit
KGHM in the first 9 months of 2019 recorded higher copper production of 530 thousand tonnes, or 14 percent higher than in the first 9 months of 2018. Sierra Gorda in Chile also recorded higher production, by 16 percent. KGHM Polska Miedź S.A. earned a net profit 71 percent higher than in the corresponding period of 2018 despite unfavourable macroeconomic conditions! Net profit in the first three quarters rose to PLN 1 666 million.
In the third quarter alone the KGHM Group earned PLN 696 million, or 91 percent higher than in the corresponding period of 2018. Revenues were higher in each of the Group’s segments – the most important being those of KGHM Polska Miedź S.A. – 15 percent. EBITDA for the KGHM Group for the first 9 months amounted to PLN 4 112 million and was higher by 8%.
These good results are connected with an improvement in production. Production of payable copper in the third quarter of 2019 amounted to 178 thousand tonnes (higher by 4%). Silver likewise provided support, with a percentage increase even higher – 22 percent. Production of silver amounted to 1 031 tonnes versus 848 tonnes in the first nine months of 2018. The production plan for all of the main metals – copper, silver, precious metals, molybdenum – was exceeded by several percent.
Such good results were achieved despite unfavourable macroeconomic conditions during the first 9 months of 2019. The price of copper fell by 9 percent, silver by 1.7% compared to the corresponding period of 2018. During this same period support came from a strengthening of the USD versus the Polish zloty by 7.6 percent.
The greatest impact on the production and financial results of the KGHM Group came mainly from the results of the Parent Entity – KGHM Polska Miedź S.A. The situation in the largest company in the Group decidedly improved compared to the corresponding period of 2018 due to the completion and optimisation of significant investments, such as the flash furnace at the Głogów I smelter and the auxilliary installation for the roasting of concentrate. The proper functioning of these investments, important for the production line, had a large impact on the results achieved.
The results of the Sierra Gorda mine in Chile are also constantly improving. Copper production increased by 11.3 thousand tonnes. The main reason for the increase in production was the higher extraction and processing of ore and higher copper recovery during processing. Extraction took place in mining areas with higher ore quality, which was reflected in the higher copper content in processed ore. Higher ore processing and gold content were also responsible for the increase in gold production by 44 percent. Production of molybdenum decreased by 23 percent due to the lower content of this metal in processed ore, which was expected due to the nature of the orebody.
The improved parameters on all fronts, financial as well as in production, is the result of advancement of the firm grip of KGHM’s strategy, which calls for optimisation in the following areas: adaptation of the model of functioning of the KGHM Group to the market environment, higher efficiency in the utilisation of resources and production processes, integration of the KGHM Group around the concept of sustainable development and technological transformation under the 4.0. Program.
Record production and higher revenues of KGHM despite unfavorable conditions
Higher payable copper production (+11 percent to 702 thousand tonnes), record silver production (+18 percent, 1 417 tonnes), higher Group revenues by 11 percent, 5 percent higher EBITDA and the initiation of new investments in the Divisions, with consistent advancement of the strategy.
Sales revenues of the KGHM Group in 2019 were higher by PLN 2 197 million (+11 percent) than in the corresponding prior-year period, including higher revenues by KGHM Polska Miedź S.A. of +PLN 1 926 million. The increase was mainly due to a higher volume of sales of copper (+8 percent) and silver (+13 percent), but also to a more favourable exchange rate alongside lower copper prices. Group EBITDA was due to increases in KGHM Polska Miedź S.A. (+PLN 203 million, +6 percent), Group companies in Poland (+PLN 40 million, +20 percent) and to Sierra Gorda (+PLN 27 million, +4 percent).
The Group earned a consolidated profit for the period of PLN 1 421 million.
Financial results of the KGHM Polska Miedź Group in the first quarter of 2018 restricted by the build-up of half-finished products
- The main priority for KGHM Polska Miedź S.A. in the first quarter of 2018 was to secure resources for the production of electrolytic copper from own concentrate during the furnace downtime of the Głogów II Copper Smelter and Refinery in the April-June timeframe. This is also the reason for the increase in anode production, the inventory of which rose in the first quarter by nearly 30 thousand tonnes of copper, and which is currently being used in the electrorefining process. Following this period of maintenance work our production of copper from own concentrate will visibly accelerate, so that by the end of the year it will be several percent higher than last year’s result. – said Rafał Pawełczak, President of the Management Board of KGHM Polska Miedź S.A.
The drop in consolidated revenue by 13% yoy in the first quarter of 2018 is mainly the result of lower yoy sales volumes of payable copper (by 14%) and silver (by 16%) in KGHM Polska Miedź S.A. with a stable PLN-denominated copper price, but with a silver price lower in PLN by 19% due to depreciation of the USD by 16%.
Production of payable copper by the KGHM Polska Miedź Group in the first quarter was lower yoy by 15%, and silver by 18%, mainly due to the stockpiling of inventories of anode copper, which is being used for the electrorefining of electrolytic copper during the three-month furnace maintenance shutdown at the Głogów II Copper Smelter and Refinery.
The 17% higher yoy production of payable copper and the 9% higher production of precious metals by KGHM International is mainly the result of significantly higher metals content in ore as well as higher recovery by the Robinson mine.
The Sierra Gorda mine for a subsequent quarter continued mining a part of the deposit with lower content of copper and molybdenum, which affected production of these metals and amounted respectively to 12 thousand tonnes and 4 million pounds (on a 55% basis), representing a decrease yoy by 15% and 18%.
Adjusted consolidated EBITDA in the first quarter of 2018 was lower by 26% compared to the same period of the prior year (from PLN 1 581 million to PLN 1 174 million), mainly due to a decrease of EBITDA in KGHM Polska Miedź S.A. by PLN 533 million due to lower sales of copper and silver. In turn, EBITDA in KGHM International and Sierra Gorda (55%) increased respectively by PLN 93 million (x2.2 yoy) and PLN 41 million (+34% yoy) mainly due to an increase in revenue with stable costs of goods sold.
Consolidated profit as at 31 March 2018 amounted to PLN 439 million and was lower yoy by 38%, reflecting the drop in EBITDA, which was partially offset by positive exchange rate differences and by lower income tax.
Net debt as of March 31st amounted to PLN 7 142 million (USD 2 092 million), and its relation to adjusted EBITDA rose to 1.5 from the level of 1.3 at the end of 2017.
The highest PLN-expressed copper prices since the start of 2013 ensured higher revenues and EBITDA for the KGHM Polska Miedź Group in the second quarter
The highest PLN-expressed copper prices since the start of 2013 ensured higher revenues and EBITDA for the KGHM Polska Miedź Group in the second quarter, despite the negative impact of the planned maintenance at the Głogów II Copper Smelter and Refinery on the achieved levels of production and sales.
The increase in consolidated revenue by 7 percent yoy to the level of PLN 5 157 million in the second quarter of 2018 is mainly the result of an increase in the price of copper by more than 1 200 USD/t (+21 percent yoy) alongside the partial offsetting of this effect by the 7 percent lower volume of copper sales yoy and the weakening of the USD/PLN exchange rate by 7 percent yoy. The average PLN-expressed price of copper in the second quarter was at the highest level since the first quarter of 2013.
Payable copper production by the Group was 10 percent lower than in the second quarter of 2017 (152 kt versus 168 kt), mainly due to the maintenance shutdown of the flash furnace at the Głogów II Copper Smelter and Refinery. Production by the international assets remained stable. The maintenance of the flash furnace also had negative impact on production of associated metals, mainly metallic silver (-20 proc. yoy). Production of molybdenum fell by 55 percent to the level of 3.8 million pounds, mainly due to the lower content of this metal in the ore extracted by the Sierra Gorda mine.
Adjusted consolidated EBITDA[i] in the second quarter of 2018 was higher by 9 percent compared to the corresponding period of 2017 (from PLN 1 282 million to PLN 1 391 million). Impact came from the higher EBITDA of the Sierra Gorda mine (by PLN 97 million) alongside changes in the revenue and costs of other segments, resulting in a net positive effect of PLN 12 million.
Consolidated profit in the second quarter amounted to PLN 172 million and was half of that achieved in the prior year. The difference was mainly due to an increase in depreciation/amortisation, the recognition of provisions (mainly due to litigation) and to a lower result on the involvement in joint ventures.
Net debt at the end of the second quarter amounted to PLN 8 019 million (USD 2 142 million), while the ratio of net debt to adjusted EBITDA amounted to 1.7.
Stable production and sales results
“The production and sales results are in line with our budget targets, and we continued initiatives aimed at the growth of the KGHM Group’s domestic and international companies. It’s worth pointing out that the key investments in Poland are on schedule,” said Radosław Stach, Vice President of the Management Board for Production.
Production of payable copper by the Group was at a similar level to that achieved in the third quarter of 2017 (171 thousand tonnes versus 170 thousand tonnes), mainly thanks to higher production of electrolytic copper by KGHM Polska Miedź S.A. after the maintenance shutdown at the Głogów II Copper Smelter and Refinery. The slightly lower production of payable copper in the third quarter by the assets of KGHM International was mainly due to a decrease in ore quality and to a decrease in ore extraction by the Robinson mine. After the first three quarters, production of payable copper by the Robinson mine as well as by all of KGHM International was at a similar level to that of the prior year. The furnace maintenance also had a negative impact on the production of associated metals, mainly metallic silver (-20% yoy). The drop in copper and molybdenum production by the Sierra Gorda mine in the first three quarters was due to the lower metals content in extracted ore.
The KGHM Group increased its revenues by PLN 590 million. (+12%), compared to the third quarter of 2017, mainly due to higher revenues earned by KGHM Polska Miedź S.A. (+PLN 396 million) and KGHM International (+PLN 137 million).
„The results of the Group are satisfactory. In Poland the increase in revenues was due to higher sales of copper. Our international assets meanwhile had higher revenues mainly due to an increase in revenue by DMC, related to a contract being advanced in the United Kingdom,” noted Katarzyna Kreczmańska-Gigol, Vice President of the Management Board for Finance,
Consolidated adjusted EBITDA in the third quarter of 2018 was lower by 13 % compared to the corresponding prior year period (from PLN 1 414 million to PLN 1 225 million). The main reason was the increase in costs of operating activities after the first 9 months, including a higher minerals extraction tax due to higher metals prices (Cu, Ag).
Consolidated net profit in the third quarter amounted to PLN 365 million and was 40% lower than in the prior year. The difference was mainly due to the lower operating results of KGHM Polska Miedź S.A. and to higher income tax.
Net debt at the end of the third quarter amounted to PLN 7 439 million (USD 2 024 million), with net debt to adjusted EBITDA of 1.6.
In the third quarter of 2018 the KGHM Group pushed forward numerous development projects in its domestic Polish companies. In line with adopted targets, a number of solutions were implemented aimed at enhancing the value of the KGHM Polska Miedź S.A. Group. These comprised the coordination of key entities, their cooperation and the elimination of overlapping activities. The Group strengthened oversight of its portfolio of investment projects in key companies to maintain and support the core production business of KGHM Polska Miedź S.A. In terms of advancing the existing Strategy, emphasis was placed on improving and unifying the functioning of the organisational processes and management standards in force in the KGHM Polska Miedź S.A. Group.
In the third quarter of 2018 a review commenced of the international assets. Completion is planned at the end of 2018. With respect to implementation of the Strategy being advanced by KGHM Polska Miedź S.A. in the Group’s international companies, KGHM is working to develop coherent reporting principles and consistent internal regulations, as well as standardised solutions in individual functional areas of the international assets.
Satisfactory results of the KGHM Group for 2018
Stabilised production, review of the assets in Poland and abroad, substantial improvement in the operating parameters of Sierra Gorda, start of the debt reduction process and the commencement of new development initiatives – these are the main elements describing the activities and results of the KGHM Polska Miedź S.A. Group in 2018. Profit earned by KGHM Polska Miedź S.A. amounted to PLN 2 billion, despite the negative impact of the macroeconomic situation.
“The revenues of the KGHM Group were higher compared to the prior year by 0.8%, at PLN 20.5 billion. The ratios adopted – EBITDA of the KGHM Group as well as EBITDA of KGHM Polska Miedź S.A. – exceeded the budget targets for 2018,” said Marcin Chludziński, CEO and President of the Management Board of KGHM Polska Miedź S.A. „Recent months have been a time of intensive work: we have maintained cost discipline, stabilised production, conducted a review of our assets in Poland and abroad, signed new, long-term contracts with our business partners, commenced the process of reducing our debt and launched a variety of new development initiatives,” added Marcin Chludziński.
In 2018 production of payable copper amounted to 634 thousand tonnes, 3 percent lower than in 2017, but higher than the target for 2018. Silver production in 2018 amounted to 1200 tonnes. Molybdenum production by Sierra Gorda decreased to 15.3 million pounds compared to 2017. „Payable copper production achieved compared to the prior year was due to the planned maintenance shutdown by the Głogów II smelter in 2018. Production was also affected by the breakdown in the Głogów I copper smelter in 2017. Molybdenum production was the result of the lower grade in extracted ore,” says Radosław Stach, Vice Pesident of the Management Board (Production). „We are consistently striving to achieve the targets related to optimal utilisation of the resource base and the Company’s production capacity, as well as optimisation of copper content in extracted ore and concentrate.”
Stable economic results
Revenues in 2018 were higher than in the comparable prior period. The main increase was in KGHM International. In terms of EBIDTA higher operating results were recorded by Sierra Gorda and KGHM International. Due to the breakdown at Głogów I in 2017 and the increase in inventories resulting from the planned maintenance shutdown at Głogów II, EBIDTA for the KGHM Group was nearly PLN 5 billion. Other operating income was slightly over a billion PLN, an increase of PLN 472 million.
„The increase in other operating income was due to exchange differences, a decrease in the impairment loss on fixed assets under construction and intangible assets not yet available for use as well as a decrease in the loss due to the measurement and realisation of financial assets,” said prof. Katarzyna Kreczmańska – Gigol, CFO and Vice Pesident of the Management Board (Finance) of KGHM Polska Miedź S.A. “Moreover, thanks to the use of factoring we accelerated the turnover of receivables, which led to higher cash held at the end of 2018.”
Continuation of strategic projects
Work continues under the Deposit Access Program. Planning work began on the siting of the GG-2 shaft. Thanks to the conclusion of discussions with local authorities, the Gmina (municipality) of Żukowice requested a change in the Study of Conditions and Directions of Land Management and in the Municipal Land Management Plan.
Under the Metallurgy Development Program another stage in the ramp-up of the Głogów I smelter was accomplished. The Company is pursuing a program of adaptation of its installations to the requirements of BAT Conclusions for the nonferrous metals industry and to restrict emissions of arsenic. The BATAs Program involves 32 investment projects at the Głogów metallurgical plant, including 20 new projects, as well as 14 projects at the Legnica plant, including 8 new ones.
Work also accelerated on the Copper Scrap Plant program being advanced at the Legnica Copper Smelter and Refinery. This division is undergoing a broad investment program comprising among others the construction of a new RCR (Revolving Casting-Refining) furnace.
In 2018 we commenced the expansion of the Żelazny Most Tailings Storage Facility. This key investment for KGHM guarantees safe operations by the Company in the copper belt in the coming years.
In 2018 we advanced numerous development projects for the domestic companies of the KGHM Group. We implemented a variety of solutions, such as enhanced coordination of key entities. We eliminated overlapping activities, which will help to increase the value of the Group. We developed the concept of the KGHM Group Council, a body which is aimed at providing comprehensive support to the companies of the Group during the process of setting directional targets and the integration of these entities’ businesses as well as enhancing corporate governance.
KGHM conducted a review of its international assets. As a result the strategy was rationalised with respect to production by KGHM International and Sierra Gorda. This Chilean company is concentrating on the Debottlenecking Program, which is aimed at increasing average annual daily ore throughput to 130, and then 140 thousand tonnes based on existing infrastructure and necessary investments. The Owners of Sierra Gorda have approved among others the purchase of additional vertimills and a third flotation waste thickener, which are key elements of the Program.
In turn the revenues of the DMC Group were twice as high as in the prior year, amounting to over USD 200 million. The Company is working on further development of this part of our activities.
Plans for 2019
In 2019 the Company will implement its new strategy for the years 2019 – 2023. The goals set by the Management Board are related to continuous improvement in profitability, financial parameters and reducing costs.