KGHM has published its report for the first quarter of 2024
The KGHM Group achieved its production volume targets for the main product lines for the first quarter of 2024 in both the domestic and international assets. Mined production in the domestic assets amounted to 102.5 thousand tonnes of copper in ore, or an increase by 2.0 thousand tonnes (+2 percent) compared to the amount recorded in the first quarter of 2023.
STABLE PRODUCTION
Production of payable copper by the KGHM Group in the first quarter of 2024 amounted to 179 thousand tonnes and was 2% higher compared to the corresponding prior-year period.
Production of copper in concentrate in the Polish assets amounted to 102.5 thousand tonnes of copper, or an increase by 2.0 thousand tonnes (+2 percent). The increase was due to better quality ore from the mines and its processing in the Concentrators. During the first three months of 2024, the extraction of ore was at the same level as in the prior year.
In accordance with cathode production plans, production of electrolytic copper amounted to 146.2 thousand tonnes and was lower by 2.9 thousand tonnes compared to the amount recorded in the first quarter of 2023. The production of cathodes results from the adopted production plans for 2024, reflecting the build-up of anode inventories and the planned maintenance at the Głogów I Smelter/Refinery. The production of metallic silver by KGHM Polska Miedź S.A. amounted to 310 tonnes and was lower by 65.1 tonnes compared to the first quarter of 2023. The decrease in metallic silver production was due to the planned maintenance shutdown of the Precious Metals Plant at the Głogów Copper Smelter and Refinery as well as the maintenance cycle in previous quarters.
The production of copper by Sierra Gorda amounted to 17.0 thousand tonnes (the 55% share held by KGHM) and was lower year-to-year due to lower content of copper in ore and lower metal recovery.
In the segment KGHM INTERNATIONAL, production year-to-year increased by 100%, to 16 thousand tonnes, mainly thanks to a substantial improvement in the operating parameters of the Robinson mine – higher copper content in ore (+36%), higher recovery (+60%), higher extraction (+67%),
SAFE FINANCES
The KGHM Group closed the first quarter of 2024 with good financial results, i.e. consolidated revenues from sales of PLN 8.3 billion, EBITDA of PLN 1.6 billion and a profit for the period of PLN 0.4 billion.
The decrease in revenues and in the operating result, year-to-year, was due to a less favourable average USD/PLN exchange rate and to lower copper prices. The increases in precious metals prices in the second half of March did not lead to a stronger reaction by investors in the first quarter. In the first quarter of 2024 the average USD to PLN exchange rate was 9 percent lower than in the first quarter of 2023. As a result, the price of copper expressed in PLN was nearly 14 percent lower than a year earlier.
In the first three months of 2024, the revenues of a single customer exceeded 10 percent of the revenues from contracts with customers of the Group and amounted to PLN 834 million. In the comparable period, the revenues of no single customer exceeded 10 percent of the revenues from contracts with customers of the Group.
The copper company has a safe level of debt, with net debt/EBITDA at the end of the first quarter of 2024 amounting to 1.5. KGHM is controlling costs and is fully capable of meeting its obligations with respect to the liabilities drawn. The cash and cash equivalents held by the Group along with the external financing obtained ensure that liquidity will be maintained and will enable the achievement of investment goals.
INVESTMENTS
KGHM is consistently advancing and planning mining and metallurgical projects in its divisions (development of the piping network, outfitting of underground infrastructure). 11.7 km of new mine tunnels were built. At the Legnica Copper Smelter and Refinery the handover of electrical documentation and the commencement of operations and prefabrication of elements in the project to modernise electrorefining is underway. The building of causeways at the Żelazny Mośt TSF is being completed on time.
The copper company is replacing its machinery park – 69 mine machines were purchased for the three mines.
SUSTAINABLE DEVELOPMENT
In 2024 KGHM is continuuing intensive activities activities related to rational and responsible production. The Company is advancing its Climate Policy as well as projects involved in the energy transformation. KGHM Polska Miedź S.A is advancing solar and wind power projects on its own land as well as RES acquisitions. The recent acquisitions of shares in three special purpose companies, which own solar farm projects with a combined capacity of 42 MW, enabled an increase in the number of solar power farms at the disposal of the Company to eight, located in the voivodeships of Lower Silesia, Łódź, Pomerania and Greater Poland, with a combined capacity of 47 MW. In the first quarter, energy sources owned by the Company, including RES, covered 23.93% of the total need for electricity by KGHM.
