An impressive first half for KGHM — the copper giant publishes its results for the first six months of 2021

Adjusted EBITDA for the KGHM Group doubled, payable copper production was higher by 8.6% and Group revenues were more than 30-percent higher versus the first half of 2020. KGHM, despite the pandemic, announces the best results in decades.

“We ended the first half with a doubling of EBITDA and a significant jump in revenues, of more than PLN 3.5 billion. We produced a higher volume of payable copper, while at the same time striving to ensure employee safety and engaging in responsible production. This can be seen in the high safety ratios as well as by the granting to our metallurgical plants of international certification under the Copper Mark,” says Marcin Chludziński, President of the Management Board of KGHM Polska Miedź S.A.

BETTER PRODUCTION RESULTS

The KGHM Group in the first half of 2021 recorded an increase in key production ratios.

Payable copper production by the KGHM Group was 8.6% higher than in the corresponding period of 2020 and amounted to 381 thousand tonnes. In turn, payable copper production by KGHM Polska Miedź S.A. rose by 4.4% compared to the corresponding period of 2020 and amounted to 293 thousand tonnes.

HIGHER REVENUES AND PROFITS

The Group recorded a doubling of adjusted EBITDA versus H1 2020 (+PLN 2 662 million). In KGHM Polska Miedź the increase by PLN 1 226 million was due to higher copper prices, while in Sierra Gorda (+PLN 1 050 million) the improvement was mainly the result of higher revenues from copper sales related to higher prices and a higher sales volume, and in KGHM INTERNATIONAL (+PLN 371 million) an additional benefit came from a drop in basic operating costs excluding depreciation/amortisation.

The improvement in EBITDA and the reversal of impairment on loans granted enabled the achievement of a profit for the period of PLN 3 723 million, or PLN 3 024 million (5.3-times) higher than in the first half of 2020.

SIERRA GORDA IN POSITIVE TERRITORY

Higher recovery and higher copper content in ore resulted in a 30 percent increase in payable copper production by Sierra Gorda (51 thousand tonnes). In the first half of 2021 this mine also recorded a 25 percent increase in silver production (15.6 tonnes), compared to the corresponding period of 2020.

Marcin Chludziński, President of KGHM Polska Miedź S.A., stressed that we are at a watershed moment for the development of the Sierra Gorda mine. “The mine has achieved full financial independence. For the first time we have positive cash flow to Poland. In the first half this amounted to nearly PLN 500 million. This was achieved thanks to the changes in management methods instituted in recent years and consistency in the implementation of corrective actions,” added Marcin Chludziński. 

GUARANTEE OF QUALITY

The Copper Mark is an international certificate of quality, a guarantee system which promotes responsible copper production. At the moment two of KGHM’s metallurgical plants – in Głogów and in Legnica – have been thus distinguished, and have consequently joined a small, elite group of companies from around the world who have earned the right to use the Copper Mark brand.

These are not the only actions being taken by the Company aimed at responsible production. The Company is expanding the scope of its environmental communications and the reporting of data through the CDP questionnaire, showing the Company’s impact on the environment. We are also engaged in preparing a comprehensive document which will set forth the Company’s Climate Policy. Among others it will announce GHG reduction goals. For years we have also been a constituent company in the FTSE4Good index series.

SAFETY FIRST – ZERO HARM

The historically-low accident ratios show a 19% decrease in the number of workplace accidents. We succeeded in maintaining a high level of employee safety throughout the ongoing COVID-19 threat. The Company also initiated a program of voluntary vaccinations for employees and their families by organising among others mobile vaccination points at KGHM’s production facilities.