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Lubelski Węgiel
Lubelski Węgiel Bogdanka S.A.

LUBELSKI WĘGIEL BOGDANKA S.A. after the first quarter of 2012

Wednesday, 2012-05-09
Bogdanka, 9 May 2012

Tangible Effects of Consistent Investments
High Growth Dynamics of Results 1Q2012/1Q2011

Lubelski Węgiel BOGDANKA S.A., the most modern and effective hard coal mine in Poland, as well as the domestic leader on the energy coal producers market, generated in the first quarter of 2012 over PLN 477 million revenue, almost 54% more than in the same period in 2011. The consolidated operating profit amounted almost to PLN 119.30 million and the Group’s net profit reached PLN 99.21 million. The operating results for the last quarter were influenced by the launch of mining operations in the Stefanów Field (October 2011) and by an increase in volume of coal allocated for sale (compared to the same quarter of 2011).

The Company’s main strategic goal is to reach the planned level of annual extraction – approx. 11.5 million tonnes of coal in 2014. The Company consistently implements the investment programme which leads to reaching the planned goals.

Production capacity of the LW BOGDANKA Group (‘000 tonnes)
 2 180,64 1 322,30 64.91%

During the period from 1 January to 31 March 2012, as compared to the analogous period of 2011, the extraction of commercial coal increased by 64.91% and amounted to 2,180,640 tonnes, (in the previous year it was 1,322,300 tonnes). The increase in commercial coal extraction by almost 65% occurred with an increase of gross extraction by less than 50%. It means that in the first quarter of 2012 LW Bogdanka S.A. recorded, in general, an output ratio higher than in the analogous period in the previous year.


 1Q 20121Q 2011
Revenue on sales 477 302309 961 53.99%
Zysk brutto 175 92972 818
EBITDA 199 046 77 906 155.50%
EBIT (Operating profit) 119 297 43 698 173.00%
Profit before taxation 123 703 44 835 175.91%
Net profit
 99 210 35 958 175.91%
Operating cash flow
 202 734 77 562 161.38%
Investing cash flow
 -138 662 -189 062 -26.66%
Financing cash flow
 50 000 -3 000 -

During the first quarter of 2012, the Lubelski Węgiel BOGDANKA Group's revenue on sales was PLN 477,302,000, which represents an increase of 53.99%, or by PLN 167,341,000, compared to the same period of the previous year.

The Group’s operating profit increased from PLN 43,698,000 (for Q1 2011) to PLN 119,297,000 (for Q1 2012) - a change of PLN +75,599,000 i.e. by 173% on a year-to-year basis. EBITDA (operating profit before depreciation/amortisation) for the period from 1 January to 31 March 2012 amounted to PLN 199,046,000 compared to PLN 77,906,000 in the same period of 2011. The increase in the operating profit is a result of launching mining operations in the Stefanów Field (October 2011) and of an additional amount of coal dedicated for sale.

The net profit for the first quarter of 2012 was PLN 99,210,000, compared to PLN 35,958,000 for the same period of 2011, which represents an increase by 175.91%, or by PLN 63,252,000.

In the first quarter of 2012, the Group financed its activities with operating cash flow and cash accumulated in the previous years. The net operating cash flow increased from PLN 77,562,000 (for Q1 2011) to PLN 202,734,000 (for Q1 2012), mainly due to the increase in the coal sale volume.

The net investing cash flows for the period from 1 January to 31 March 2012 amounted to PLN 138,662,000 and were lower than in the analogous period in 2011 by PLN 50,400,000. The Company continues to pursue the investment process, however the scope of the related work in individual quarters under analysis was different, hence the lower value of net cash flows in 2012.

In the period from January to March 2012, the Group generated positive net financing cash flow of PLN 50,000,000 (the third tranche, out of four tranches available from a mid-term working loan at PEKAO S.A., was used).

Profitability ratios of the LW BOGDANKA Group


Gross margin on sales 36.86%23.49% 13.37 56.92%
Rentowność EBITDA 41.70%25.13% 16.57 65.94%
Rentowność EBIT 24.99%14.10% 10.89 77.23%
Gross margin 25.92%
Net margin 20.79% 11.60% 9.19 79.22%
Return on Assets 3.13% 1.26% 1.87 148.41%
Return on Equity 4.53% 1.81%2.72 150.28%

During the first quarter of 2012, all profitability ratios achieved higher values than in the same period of the previous year.

Gross margin on sales of the LW BOGDANKA Group increased from 23.49% (Q1 2011) to 36.86% (Q1 2012). The change in value of that ratio was affected by higher (in nominal terms) increase in the generated revenue in relation to the incurred costs of sold products, goods and materials – this also translated into an increased gross profit.

In the analysed period, EBIT (operating profit) amounted to 24.99%, which means an increase by 10.89 p.p. in comparison to the analogous period in the previous year. An increase in gross profit, which is realised through an increase in the Company’s coal sales revenue, is responsible for the change in value of the described ratio.

EBITDA increased from 25.13% (Q1 2011) to 41.70% (Q1 2012). In addition to the growing operating result, the amortisation/depreciation value, growing from PLN 34,208,000 (Q1 2011) to PLN 79,749,000 (Q1 2012), also contributes to the change in the ratio value.

The gross margin for the first quarter of 2012 amounted to 25.92% and was by 11.46 p.p. higher than the gross margin for the first quarter of 2011.

Net margin on the Lubelski Węgiel Bogdanka S.A. Group's operations amounted to 20.79% for the first quarter of 2012, compared to 11.60% for the first quarter of 2011.

The increase in return of assets (from 1.26% for Q1 2011 to 3.13% for Q1 2012) is a consequence of a higher dynamics of the net profit, as compared to the increase of the Company’s assets’ value. The effects of commercial use of assets that have been so far produced by the Company are already noticeable.

Structure by type of revenue on sales of the LW BOGDANKA Group:
[PLN '000]
Sales of coal 462 340
 289 138 93.28%
Sales of ceramics
 1 889
 0.39% 2 039 0.66%
Other activities10 392
 2.18% 12 704 4.10%
Sales of goods and materials
 2 681
 0.56% 6 080 1.96%
Total revenue on sales
 477 302
 100.00% 309 961

The main source of sales revenue for the LW BOGDANKA Group in the first quarter of 2012 (as well as in the first quarter of 2011) was the production and sale of power coal. From 1 January to 31 March 2012, this activity generated 96.87% of the LW BOGDANKA Group's sales revenue (93.28% in the same period of the previous year). The increase in the revenue on sales of coal is a consequence of higher volumes of coal sold (+44.42%), with only slightly higher sale unit price.

Above 75% of coal sales (in terms of value) realised in the period from 1 January to 31 March 2012 were carried out on the basis of long–term commercial agreements concluded between LW BOGDANKA and Elektrownia Kozienice S.A., GDF Suez Energia S.A., Elektrownia Ostrołęka S.A. and Grupa Ożarów. A drop in the share of key customers in the total value of revenue (in Q1 2011 the above power plants generated more than 80% of revenue of the LW BOGDANKA Group) is a consequence of diversification of sales to smaller customers (due to additional volume of commercial coal available).

Bogdanka is a mining company – producer of coal for the purposes of the commercial power sector. In the first quarter of the current year, we had results of an impressive growth dynamics, compared to the same period of the previous year. This is not an effect of some kind of extraordinary market economic situation. This is a result of a consistent implementation of our development strategy. A year ago, the Company carried a technical, organisational and financial burden of the conducted investments. Today, we derive tangible results of that process. Effective extraction means also mastering the changing geological and mining conditions. Continuation of the preparatory and development works, a specified regime of the technological process and a constant search of innovative solutions. We will be consistent within this matter. By increasing our competitive advantages, we would like to ensure a permanent growth of the Company’s value for the shareholders,” Mirosław Taras, President of the Management Board of LW Bogdanka S.A.

Today is:
10 of July 2020
Name day of:
Filipa, Sylwany, Witalisa
© LW „Bogdanka” S.A. - 2018
Realization: Data Flow sp. z o.o.