Bogdanka's results under pressure from impairment loss
Lubelski Węgiel Bogdanka S.A. has published consolidated financial results for H1 2024. LW Bogdanka Group’s revenues for H1 2024 reached PLN 1,670.6 million while EBITDA stood at PLN 262.7 million.
Commercial coal output in the period under in question was 3.5 million tons, while sales were 3.6 million tons.
The financial results for the first half of 2024 reflect the challenges we face in the coal market. Declining demand for our product and lower market prices are affecting our business, but we are taking the necessary steps to adapt to the dynamic changes in the environment. The decision to recognize an impairment loss for the carrying value of non-current assets was necessary to accurately reflect future market prospects in the current value of our assets in light of future market prospects. However, it is worth emphasizing that this operation is purely accounting in nature and does not affect our current liquidity or EBITDA. We are continuing optimization activities and cooperation with coal buyers, both domestic and foreign, which allows us to effectively plan sales in the long term. We have also begun to update the assumptions of our strategy in order to respond appropriately to challenges and opportunities in the market,
- said Artur Wasilewski, Vice-President of the Management Board for Economic and Financial Affairs.
The total length of roadway excavations completed in H1 2024 was 11.7 km. Reconstruction of excavations was carried out according to the adopted schedules. Total expenditures on reconstruction of roadway excavations in this period amounted to PLN 45,5 million.
Mining yield was 63.2%, and was 9.3% higher than in the corresponding period a year ago.
The company has upheld its strong market position. At the end of H1 2024 it had a 31.6% market share in coal supplies to the commercial power sector.
Approximately 79% of coal (in value terms) in H1 2024 was sold to Enea Wytwarzanie sp. z o.o. and Enea Elektrownia Połaniec S.A. In the corresponding period of 2023 the share of the above buyers was approx. 10.0 percentage points higher.
In H1 2024, the LW Bogdanka Group incurred capital expenditures of nearly PLN 476.4 million. The largest chunk of this amount, PLN 229.8 million, was spent on new roadways and modernization of existing ones.
The table below portrays the LW Bogdanka Group’s financial results in H1 2024:
[PLN 000s] | H1 2023 | H1 2024 | Change |
|---|---|---|---|
Net revenues on sales | 1,825,080 | 1,670,581 | - 8,5% |
EBITDA | 532,796 | 262,660 | - 50,7% |
EBIT | 274,932 | - 1,131,993 | - 511,7% |
Net profit/loss | 225,847 | - 907,970 | - 502,0% |
Lubelski Węgiel Bogdanka S.A. is a leading hard coal producer in Poland that stands apart from its peers in terms of its modern and efficient mining. It is one of the largest Polish hard coal mines. Lubelski Węgiel Bogdanka S.A. chiefly conducts mining operations in terms of hard coal extraction, enrichment and sales. It supplies this raw material mainly to industrial offtakers. Supply contracts are long-term, and the product is sold to the commercial power sector and the industrial power sector.
The company has been listed on the Warsaw Stock Exchange since June of 2009. In August 2022, Lubelski Węgiel Bogdanka S.A. returned to listing on the WIG-ESG Index.
Since October of 2015 Bogdanka has been a member of the Enea Group, the second largest player on Poland’s electrical power market in terms of the generation of electricity, which manages the entire value chain on the electricity market ranging from fuel to the generation of electricity, distribution, sales (supply) and customer service.