LW BOGDANKA S.A. after Q1/2010: increase in revenue and net profit
Monday, 2010-05-17
Lubelski Węgiel Bogdanka S.A., one of the largest and most advanced hard coal mines in Poland and one of the leaders of the domestic market for power coal producers, generated a net profit of PLN 52.77 million for the first quarter of 2010 (an 11.5% increase over the previous year) and an operating profit of PLN 62.16 million (an increase of more than 5% over Q1/2009). Revenue on sales for the period increased by more than 20%, reaching PLN 294.1 million.
In March 2010 Polish pension funds acquired from the State Treasury a block of 46.7% of shares in LW Bogdanka for more than PLN 1 billion. Consequently, LW Bogdanka became a private company.
FINANCIAL RESULTS – DETAILS
Detailed financial results of the LW BOGDANKA Group after the first quarter of 2010 are presented in the table below:
The main source of revenue on sales of the LW BOGDANKA Group in the course of Q1/2010 (as in the previous year) was the production and sale of power coal. From 1 January to 31 March 2010, sales of power coal accounted for 96.87% of the LW BOGDANKA Group’s sales revenue (95.56% in the same period of 2009).
Most (approx. 85%) coal sales realised in the above-mentioned period (as well as in the same period of the previous year) were carried out on the basis of long-term commercial agreements with regular key customers: Elektrownia Kozienice S.A., GDF Suez Energia S.A. (the former Elektrownia Połaniec S.A.), Zakłady Azotowe Puławy S.A. and Elektrownia Ostrołęka S.A.
During the first quarter of 2010, the profitability ratios regarding the Company’s operations achieved slightly higher values than in the same period of the previous year. Gross revenue on sales of the LW BOGDANKA Group reached 32.53%. EBIT amounted to 21.14%. Gross margin amounted to 22.37%, while net margin reached the level of 17.94%.
In the first quarter of 2010, the LW BOGDANKA Group recorded a 5.13% increase in operating profits compared to the same period of the previous year, an increase to the amount of PLN 62.16 million from PLN 59.13 million The main factor for the increase was the growth of the Group’s revenue on sales by 20.28%. The net profit of the LW BOGDANKA Group for the first three months of 2010 was PLN 52.77 million and was higher by 11.53% than the net profit in the previous year’s corresponding period.
LAUNCH OF COAL-PLOUGHING COMPLEX
The initial stage of the test launch of a new coal-ploughing complex intended for the exploitation of lower deposits of coal was completed in late March 2010. Within a month of the launch of the complex, it achieved a yield of 8,000 tons of output per day. As of today, this amounts to an increase of commercial coal extraction by approx. 7% for LW BOGDANKA.
STRATEGIC OBJECTIVES
The main strategic objectives of development defined by the LW BOGDANKA Group are:
• doubling the level of extraction of raw materials and thereby doubling the share in the market for hard coal producers in Poland,
• improving the efficiency of hard coal extraction and production,
• ensuring that LW BOGDANKA S.A. is self-sufficient with regard to the supply of electricity by developing electricity production activities;
• environmental protection measures.
ACCOMPLISHMENT OF ISSUE OBJECTIVES
Investment expenditure of LW Bogdanka planned for 2010 is presented in the table below:
LW Bogdanka’s key investment plans for 2010 are:
• Stefanów Field:
o continuing the construction of the excavation and ventilation shaft;
o construction of headframe and top shaft building for shaft 2.1 and construction of the lifting machine supply system;
o Building facilities on the Stefanów Field - completion of construction of lifting machine S 2.1 building with switch room, lifting machine supply system and extension of the 110 kV station, construction of main fans station;
o Central air-conditioning system of the Stefanów Field – works continued.
• Extension of the Mechanical Coal Processing Plant – selection of a contractor and commencement of extension works to achieve the production capacity of 2400 Mg/h, continued construction of the excavated material haulage facilities from the Stefanów Field to the Mechanical Coal Processing Plant.
• Extension of Bogdanka’s track system, in relation to the extraction increase planned for 2011 – tender procedure and start of extension.
• Work related to getting access to coal deposits.
• Purchase of finished products.
• Launch of coal-ploughing complex.
• Replacement investments.
• Building and modernisation of workings in Bogdanka and Nadrybie fields.
Enlarging the Stefanów Field will enable to double the production capacity of LW BOGDANKA S.A., as well as the annual quantity of hard coal extraction, starting from the current amount of 5.3 million tonnes to 11.1 million tonnes per annum in 2014.
“We are presenting our investors with yet another quarter of good results and progress in completing issue objectives. This not only provides the proof of our dedication to systematic development of shareholder value, but also contributes to improving the image of the entire coal industry. Bogdanka’s dominance of this sector, strategically important for Poland, is strong and clearly visible in terms of economic indicators. Our coal extraction efficiency confirms our belief that we are able to effectively compete against imported coal. We also appreciate the trust our contractors place in us, as evidenced, for example, by the new agreements with Huta Łabędy. LW Bogdanka is now a wholly privately owned company, belonging to its stock market investors. Our strategic objectives remain the same: development, strengthening our market position, and proving that the Polish coal industry can be profitable,” said Mirosław Taras, the President of the Management Board at LW Bogdanka S.A.
In March 2010 Polish pension funds acquired from the State Treasury a block of 46.7% of shares in LW Bogdanka for more than PLN 1 billion. Consequently, LW Bogdanka became a private company.
FINANCIAL RESULTS – DETAILS
Detailed financial results of the LW BOGDANKA Group after the first quarter of 2010 are presented in the table below:
The main source of revenue on sales of the LW BOGDANKA Group in the course of Q1/2010 (as in the previous year) was the production and sale of power coal. From 1 January to 31 March 2010, sales of power coal accounted for 96.87% of the LW BOGDANKA Group’s sales revenue (95.56% in the same period of 2009).
Most (approx. 85%) coal sales realised in the above-mentioned period (as well as in the same period of the previous year) were carried out on the basis of long-term commercial agreements with regular key customers: Elektrownia Kozienice S.A., GDF Suez Energia S.A. (the former Elektrownia Połaniec S.A.), Zakłady Azotowe Puławy S.A. and Elektrownia Ostrołęka S.A.
During the first quarter of 2010, the profitability ratios regarding the Company’s operations achieved slightly higher values than in the same period of the previous year. Gross revenue on sales of the LW BOGDANKA Group reached 32.53%. EBIT amounted to 21.14%. Gross margin amounted to 22.37%, while net margin reached the level of 17.94%.
In the first quarter of 2010, the LW BOGDANKA Group recorded a 5.13% increase in operating profits compared to the same period of the previous year, an increase to the amount of PLN 62.16 million from PLN 59.13 million The main factor for the increase was the growth of the Group’s revenue on sales by 20.28%. The net profit of the LW BOGDANKA Group for the first three months of 2010 was PLN 52.77 million and was higher by 11.53% than the net profit in the previous year’s corresponding period.
LAUNCH OF COAL-PLOUGHING COMPLEX
The initial stage of the test launch of a new coal-ploughing complex intended for the exploitation of lower deposits of coal was completed in late March 2010. Within a month of the launch of the complex, it achieved a yield of 8,000 tons of output per day. As of today, this amounts to an increase of commercial coal extraction by approx. 7% for LW BOGDANKA.
STRATEGIC OBJECTIVES
The main strategic objectives of development defined by the LW BOGDANKA Group are:
• doubling the level of extraction of raw materials and thereby doubling the share in the market for hard coal producers in Poland,
• improving the efficiency of hard coal extraction and production,
• ensuring that LW BOGDANKA S.A. is self-sufficient with regard to the supply of electricity by developing electricity production activities;
• environmental protection measures.
ACCOMPLISHMENT OF ISSUE OBJECTIVES
Investment expenditure of LW Bogdanka planned for 2010 is presented in the table below:
LW Bogdanka’s key investment plans for 2010 are:
• Stefanów Field:
o continuing the construction of the excavation and ventilation shaft;
o construction of headframe and top shaft building for shaft 2.1 and construction of the lifting machine supply system;
o Building facilities on the Stefanów Field - completion of construction of lifting machine S 2.1 building with switch room, lifting machine supply system and extension of the 110 kV station, construction of main fans station;
o Central air-conditioning system of the Stefanów Field – works continued.
• Extension of the Mechanical Coal Processing Plant – selection of a contractor and commencement of extension works to achieve the production capacity of 2400 Mg/h, continued construction of the excavated material haulage facilities from the Stefanów Field to the Mechanical Coal Processing Plant.
• Extension of Bogdanka’s track system, in relation to the extraction increase planned for 2011 – tender procedure and start of extension.
• Work related to getting access to coal deposits.
• Purchase of finished products.
• Launch of coal-ploughing complex.
• Replacement investments.
• Building and modernisation of workings in Bogdanka and Nadrybie fields.
Enlarging the Stefanów Field will enable to double the production capacity of LW BOGDANKA S.A., as well as the annual quantity of hard coal extraction, starting from the current amount of 5.3 million tonnes to 11.1 million tonnes per annum in 2014.
“We are presenting our investors with yet another quarter of good results and progress in completing issue objectives. This not only provides the proof of our dedication to systematic development of shareholder value, but also contributes to improving the image of the entire coal industry. Bogdanka’s dominance of this sector, strategically important for Poland, is strong and clearly visible in terms of economic indicators. Our coal extraction efficiency confirms our belief that we are able to effectively compete against imported coal. We also appreciate the trust our contractors place in us, as evidenced, for example, by the new agreements with Huta Łabędy. LW Bogdanka is now a wholly privately owned company, belonging to its stock market investors. Our strategic objectives remain the same: development, strengthening our market position, and proving that the Polish coal industry can be profitable,” said Mirosław Taras, the President of the Management Board at LW Bogdanka S.A.
