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Lubelski Węgiel
Lubelski Węgiel Bogdanka S.A.

Statement by Zbigniew Stopa, CEO of LW Bogdanka S.A. about the dividend

Wednesday, 2015-06-10

Bogdanka, 10th June 2015

 

PRESS RELEASE



STATEMENT BY ZBIGNIEW STOPA, CEO OF  LW BOGDANKA S.A.

The situation on the Polish coal market continues to worsen. This is connected with a continuing oversupply of coal and the aggressive price policy of the government-subsidized Kompania Węglowa. A consequence of these factors is the threat of a reduction in the volume of sales to Bogdanka’s customers in 2015 and perhaps over a longer perspective. At this time we estimate our sales capacity for this year at 8.5 million tonnes, which is much less than our production capacity.

This situation forces us to cut production further and, along with that, to seek savings in every aspect of our operations, to be prepared not only for further continuation of the current difficult market situation but even for worsening of the situation if events unfold negatively.

We are conducting intensive sales initiatives to obtain additional coal customers. We are also implementing a series of restructuring measures to reduce costs. These include further reduction in the level of capital expenditures (to the minimum necessary to maintain the continuity of the company’s business), reduction of the permanent headcount and outsourcing services, limiting working time to 5 days per week, organizational changes, and further reduction in other operating costs.

Meanwhile, we have decided to propose to our shareholders that 37.5% of the net profit from 2014 be earmarked for “reserve capital, to be used for payment of a dividend,” instead of immediately earmarking this amount for a dividend. In our view, this will maintain the necessary level of cash in the company to ensure financial stability and reliability. At the same time, in the event of positive changes in the market situation and the appropriate level of contracting by the company for upcoming years, this solution will enable payment of an advance dividend for financial year 2015 during this year (reflecting funds from reserve capital).

I believe that our shareholders will understand the reasons and the necessity for the management board’s issuance of this recommendation. We want to continue to be a dividend-paying company, but—as demonstrated by the situation at the Silesian mines—in the current market situation the company’s liquidity and financial stability should be treated as an absolute priority.

 

For enquiries, please contact:

Magda Kołodziejczyk, M+G
phone +48 22 416 01 02, +48 501 16 88 07
e-mail: magda.kolodziejczyk@mplusg.com.pl  
 



LW BOGDANKA – HIGHLIGHTS


Lubelski Węgiel Bogdanka SA is the most modern bituminous coal mine in Poland and one of the largest. In 2014, Bogdanka produced 9.19 million tonnes of commercial coal.

LW BOGDANKA primarily conducts mining operations involving extraction, enrichment and sale of bituminous coal.

The Bogdanka mine mainly supplies industrial customers in eastern and north-eastern Poland. Bogdanka’s customer base is stable and sales are made primarily under long-term contracts. The main outlets for coal from LW BOGDANKA are commercial and industrial power producers.

The company stands out in its industry for its financial results, the efficiency of its coal extraction, and its investment plans. The LW Bogdanka Group employs about 5,600 people.

More at www.bogdanka.eu
 

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