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Lubelski Węgiel
Lubelski Węgiel Bogdanka S.A.

Bogdanka after Q3 2016 - yet another quarter of good results despite still difficult market situation

Thursday, 2016-11-10

Bogdanka, 10 November 2016

 

PRESS RELEASE


 

LW BOGDANKA AFTER Q3 2016 - YET ANOTHER QUARTER OF GOOD RESULTS DESPITE STILL DIFFICULT MARKET SITUATION
 

After the three quarters of 2016, the Lubelski Węgiel Bogdanka Group generated revenue of PLN 1.3 billion (at a similar level to the one achieved last year despite lower coal prices) and net profit of PLN 120.2 million (lower by over 9% compared to the previous year). In the period in question, EBIT amounted to PLN 154.6 million (a decrease of 11.4% y/y), while EBITDA totalled PLN 432.3 million (a decrease of 5.6%).

The Company believes the achieved financial results are very good. Continuous cost control and optimisation of capital expenditure made it possible to maintain high profitability ratios despite the fact that the sale price of coal went down by nearly 11% year on year. As a result, EBITDA after the three quarters of 2016 remained at an above-average level of 32.9% in relation to other operators in the world’s mining industry.
 
In Q3 2016, commercial coal production reached 2.4 million tonnes. Sales in this period also remained at the level of 2.4 million tonnes. As a consequence, after the three quarters of 2016, both production and sales of commercial coal amounted to about 6.7 million tonnes. The length of gallery workings completed in the first nine months of 2016 totalled 17.2 km, an 11% increase compared to the same period of 2015.

As it has previously announced, the Company estimates that the production and sales of coal in 2016 will range between about 8.5 and 9 million tonnes. After the three quarters of 2016, the Company already achieved almost 75% of the upper range of the announced annual extraction and therefore the full-year extraction and sales is expected to reach nearly 9 million tonnes.  


The Company retains a strong market position. After Q3 2016, the Company’s share in the market of thermal coal sales accounted for 15.7%, and its share in the market of thermal coal sales to commercial power plants accounted for 25.9%.  That means that the Company has come back to levels similar to those achieved in 2014, in the aftermath of the turbulence on the Polish coal market in 2015.

 

 

“Given the current market conditions, I believe that the financial results that we have achieved in the three quarters of 2016 are very good. Continuous and consistent cost control and optimisation of capital expenditure made it possible to obtain such results. We keep liquidity on a safe level and remain the most effective and the most modern hard coal mine in Poland. Our mine provides timely supplies of more than a quarter of coal required by Polish power plants,” said Krzysztof Szlaga, President of the Management Board of Lubelski Węgiel Bogdanka S.A.
 
“In Q3 2016 we strengthened our long-term security of extraction by signing annexes to long-term agreements with Enea Wytwarzanie Sp. z o.o. which increased our supplies to Enea. The annexes confirm the benefits that Bogdanka gains as a result of joining the Enea Group and co-building a modern raw materials and energy corporation. At the end of the quarter we also signed an annex which extends until 2021 an agreement for the supplies of coal to Połaniec Power Plant that we have concluded with ENGIE Energia Polska S.A. Those agreements give us solid foundations for the upcoming years to make long-term plans regarding our production, which will translate into a better cost position. This is particularly important in the midst of the difficult situation on the Polish coal market. Although the third quarter saw a clear growth of coal prices on international markets, the prices of coal in Poland remain low,”
 said Krzysztof Szlaga.

For further information 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 S.A. is the most modern and one of the largest hard coal mines in Poland. In 2015 production of Bogdanka’s commercial coal amounted to 8.5 million tonnes.

LW BOGDANKA conducts mining activity with respect to extraction, agglomeration and sale of hard coal. The BOGDANKA mine supplies mainly the industrial customers based in the eastern and north-eastern Poland. The market of customers is stable, and the sale is carried out mainly under long-term agreements. LW BOGDANKA’s major commercial coal sales channels are commercial power and industrial power industries.  

The Company’s financial results, hard coal extraction capacity and investment plans distinguish the Company from other organisations in the industry. LW Bogdanka S.A. has been listed on the Warsaw Stock Exchange since July 2009. Since October 2015, LW Bogdanka S.A. has been part of the Enea Group, one of the leaders of the Polish power market.

For further information visit www.bogdanka.eu

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