Poland’s largest coking coal producer Jastrzębska Spółka Węglowa (JSW) reported a consolidated net profit of zł.25 million in the second quarter of 2013, much lower than market consensus forecast of zł.42 million.
“The results correspond to a period of low coal and coke prices and an unfavorable economic situation,” the company said in its statement.
The profit falling below market expectations may be a herald of even worse news. In early August the company’s CEO Jarosław Zagórowski warned that the company may even see a net loss in the third quarter of this year due to falling coal prices, according to Reuters.
The CEO added that JSW had earlier expected to remain in the black thanks to cost cuts, but prices fell more than forecast. “Analysts are right to say that we will have to work hard to close the year in the black because, of course, there is a risk of a [full-year] net loss,” he said.
Despite facing harsh times, the company is not scrapping its expansion plans. It is currently looking to acquire a coking plant from Czech mining group New World Resources, provided the seller meets all of JSW’s conditions. The Polish miner has voiced several reservations after performing due diligence and the company is now waiting for a reply.
“There are factors that may result in future costs,” JSW’s CEO said. “The final offer will depend on the answer we get.”
The company’s Q2 operating profit amounted to zł.54.5 million, while revenue was at zł.1.93 billion. Analysts expected an operating profit of zł.67.8 million and revenue of zł.1.97 billion. In the first half of this year, JSW had a net profit of zł.166.9 million, with its operating profit at zł.258.6 million and revenue at zł.4.11 billion.
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