Improvement in the Operational and Financial Results of the KGHM Polska Miedź S.A. Group

The KGHM Polska Miedź S.A. Group achieved a net profit of PLN 2.87 billion in 2024. The production of payable copper reached 730 thousand tonnes, representing a 3% y/y increase. During the same period, the Group's revenues amounted to PLN 35.3 billion, reflecting a 6% y/y growth. The copper company also recorded a significant increase in EBITDA at both standalone (+25% y/y) and consolidated levels (+58% y/y).

KGHM Polska Miedź S.A. has been operating in the market for over 60 years and is currently at a unique stage of development. The company requires bold and responsible decisions made with great caution and consideration for the long-term perspective. Each successive year poses challenges in mining operations — we face declining ore grades, decreasing ore thickness, longer haulage distances, and increasing costs of ventilation and transportation. Waste management and water management demand substantial investments, stated Andrzej Szydło, President of the Management Board of KGHM Polska Miedź S.A. The increasingly challenging mining conditions must be balanced by implementing new investment projects and initiatives that will sustainably reduce operational costs, he added.

Time for Corrective Actions

Last year, KGHM conducted several audit proceedings, identifying abuses and negligence in areas such as water management, HR activities, sponsorship expenses, donations, and investments in photovoltaic farms. Consequently, the company implemented numerous corrective actions.

A key challenge was the capacity level of the Żelazny Most Tailings Storage Facility. Thanks to swift decisions and actions taken at the turn of spring and summer of 2024, the issue was brought under control. Currently, the reservoir's condition poses no threat to production continuity.

In 2024, KGHM also reviewed its international assets, strengthened oversight, the structure of international assets was sorted out, and made strategic decisions regarding the Victoria project.

Cost Reduction and Financial Stability

In 2024, the net profit of the KGHM Group amounted to PLN 2.87 billion. Consolidated revenues reached PLN 35.3 billion, marking a 6% y/y increase. Adjusted EBITDA reached PLN 8.46 billion (+58% y/y). The Group achieved a 9% annual reduction in costs, with particular emphasis on a 2% decrease in material costs such as fuels and energy factors.

As a result of measures undertaken in 2024, significant cost savings were achieved. Consequently, with production levels remaining stable year-on-year, material consumption costs were reduced as regards fuel and energy carriers' expenses. In 2025, KGHM Polska Miedź S.A. continues its efforts in this area by formalizing and implementing a Cost Optimization Plan - an essential condition for achieving long-term goals. Optimization projects are being launched in material consumption planning and settlement as well as services provided by external entities - stated Andrzej Szydło, President of the Management Board of KGHM Polska Miedź S.A.

KGHM aims to optimize its financing structure by focusing on long-term instruments, shortening the cash conversion cycle, and improving market and credit risk management efficiency. Last year, the company issued bonds with a nominal value of PLN 1 billion. Additionally, Series C bonds debuted on the Catalyst market of the Warsaw Stock Exchange.

The KGHM Group maintains high financial liquidity and stable debt levels. At the end of the year, the net debt-to-adjusted EBITDA ratio stood at 0.8 - evidence of effective debt control and risk management efficiency. The KGHM Group's total assets reached PLN 53.9 billion at the end of the reporting period.

Global Copper Production Growth

In 2024, copper, silver, and TPM (gold, platinum, palladium) production exceeded budget assumptions for this period at a consolidated level. KGHM produced 729.7 thousand tonnes of payable copper compared to 710.9 thousand tonnes in the previous year (+2.6% y/y). Growth was driven by KGHM INTERNATIONAL LTD and Sierra Gorda SCM while offsetting slightly lower domestic production due to planned maintenance at the Głogów Copper Smelter and Refinery.

During this period, silver production amounted to 1341 tonnes and was 6% lower than the record result in 2023, while TPM production reached 173 thousand troy ounces with molybdenum output at 3.4 million pounds.

Investments in the Core Production Business

In 2024, Capital expenditures (CAPEX) by KGHM amounted to PLN 3.94 billion (+13% y/y). Priority was given to investments within core technological processes: mining expenditures exceeded PLN 3 billion covering mine shafts outfitting (PLN 643 million), machinery replacement (PLN 449 million), mine dewatering (PLN 298 million), and expansion of the Żelazny Most Tailings Storage Facility (PLN 253 million). Four key projects under the Deposit Access Program- shafts GG-1, GG-2, Retków, and Gaworzyce- are underway.

As regards metallurgy, investments reached PLN 714 million focusing on modernizing, among others: Głogów I Copper Smelter and Refinery including upgrades to the flash and electric furnace, sulfuric acid plant installation, control systems up-date. Investment activities also included the Concentration Plants.

Plans for the Future

The Company is intensively working on long-term development plans. An analysis conducted last year regarding core technological processes' consistency, provides a foundation for determining optimal growth directions over an extended timeframe. Priorities include ensuring sustainable operational conditions across mining operations, ore processing and metallurgy. KGHM will continue exploration activities aimed at expanding the resource base, sustaining or increasing production levels, and maximize asset value in the long-term perspective.