The FINANCIAL — In the first quarter of 2014, by maintaining cost discipline and a stable level of production, the Company earned a net profit of PLN 507 million. The financial result was mainly impacted by the decrease in the prices of copper and silver and in the exchange rate.
Copper production increased by 1% versus the prior year. After excluding the impact of the metals extraction tax and of purchased copper-bearing materials, expenses by nature were lower by 1% than in the first quarter of 2013.
The change in the financial result versus the first quarter of 2013 was mainly due to lower metals prices, a lower exchange rate and to a decrease in sales volume.
The decrease in metals prices, and in particular silver, had a decisive impact on the economic results of the entire Group, in terms of finances and unit costs as well as the level of production of copper equivalent. The operating result (EBITDA) of the Group amounted to PLN 1 billion 75 million.
In 2014 key investments are being advanced which will strengthen the position of KGHM on international markets and will increase its competitiveness in the sector. This year, KGHM will allocate over PLN 4 billion towards realisation of its strategic projects.
„A milestone for KGHM will be the commencement of production by the Sierra Gorda mine. Completion of its construction, according to plan, will take place in the middle of this year,” said Herbert Wirth, President of the Management Board of KGHM Polska Miedź SA. „Until the end of 2014 the mine will successively increase production. We expect to achieve full production capacity in 2015, when the mine will be producing 110 thousand tonnes of ore daily and 120 000 thousand tonnes of copper annually,” said President Wirth.
Key activities are being undertaken at the Robinson mine (Nevada, USA). By the end of the second quarter of 2014 this mine will complete work on a long-term plan for the Ruth pit, which will result in access being gained to ore of better quality and to greater production capacity in 2015 and subsequent years. The investment in pre-stripping of the Ruth pit will have a substantial positive impact on future production and costs once access has been gained to the ore from this pit.
Especially important for KGHM are investments related to maintaining production in the Polish mines by developing the system of deep underground mining. In April KGHM commenced production below 1200 meters in the „Głogów Głęboki – Przemysłowy” or Deep Głogów area. Mining this ore will ensure the continued production capacity of the core business in Poland at the current level.
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