Operating results of LW Bogdanka S.A. influenced by temporary deterioration of market conditions as well as technical and geological difficulties
LW Bogdanka S.A., the most modern and effective hard coal mine in Poland, making part of the Enea Group, one of the leaders in Poland’s power market, published its consolidated financial results after three quarters of 2020.
Consolidated revenue for that period amounted to PLN 1,353.5 million (decrease by 16.8%), EBITDA – PLN 317.6 million (down by 48%), operating profit – PLN 50.7 million (down by 84.1%), and net profit – PLN 34.8 million (down by 86.8%).
Financial results in Q3 2020 are a consequence of decreased sales stemming from COVID-19 pandemic as well as technical and geological issues. After the economic slowdown period in the first half of 2020, the demand for power coal has returned to normal and sales have returned to the levels recorded in previous years. The necessary limitation of progress on longwalls was followed by the issue of deforming pressure increment, which temporarily limited the operational capacity of longwall workings in September, hence limiting the wall progress. Such instances are, however, typical of mining operations and are temporary
– said Artur Wasil, President of the Management Board of LW Bogdanka S.A.
After 3Qs of 2020, Bogdanka built 19.7 km of galleries, of which 6.6 km were built in Q3 2020 alone. Production of commercial coal after the first nine months of the year amounted to 5.5 million tonnes, which is 22.3 % less year-on-year (in Q3 alone, production amounted to nearly 1.8 tonnes). Coal sales after 3Qs of 2020 reached 5.7 million tonnes. At the end of September 2020 the average yield amounted to 64.5%, in comparison to 65% the year before, and in Q3 2020 alone it amounted to 60.2% (compared to 64.6% in Q3 2019).
In the period under analysis, LW Bogdanka S.A. also retained its market position reaching a high 27.4% share in the sales of coal to commercial power plants. The share in total power coal sales accounted for 20.8%. Approximately 85% of sales generated in the three quarters were performed to Enea Wytwarzanie and Enea Elektrownia Połaniec.
In three quarters of 2020, the LW Bogdanka Group’s capex approached to PLN 495.9 million. The largest portion of this sum, i.e. PLN 223.5 million, was used for new excavations and modernisation of the existing ones.
[PLN`000] | IIIQ 2019 | IIIQ 2020 | Change | I-IIIQ 2019 | I-IIIQ 2020 | Change |
|---|---|---|---|---|---|---|
Net revenue | 527 776 | 504 522 | - 4,4% | 1 626 112 | 1 353 533 | - 16,8% |
EBITDA | 176 927 | 96 540 | - 45,4% | 611 346 | 317 648 | - 48,0% |
EBIT | 77 872 | 842 | - 98,9% | 319 679 | 50 742 | - 84,1% |
Net profit/(loss) | 66 031 | - 1 830 | - | 263 954 | 34 839 | - 86,8% |
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.