Record annual results of the KGHM Group for 2021
Higher production, higher revenues, record operating profit and solid net profit – the KGHM Group summarises the year 2021, which it closed among others with its largest adjusted EBITDA in history, exceeding PLN 10.3 billion. The copper giant also marked a 6 percent increase in copper production by the Group.
Excellent financial and operating results
In 2021 the KGHM Group recorded an increase in copper production of 6.3 percent, or by 44.6 thousand tonnes more than in 2020. There were increases recorded by all of the Group’s segments, in particular Sierra Gorda SCM (+22.6 thousand tonnes on a 55% basis) and the Parent Entity KGHM Polska Miedź S.A. (+17.2 thousand tonnes). The increase in production and sales volumes, combined with a good copper price, led to a more-than 26% increase in Group revenues, which amounted to PLN 29.8 billion.
The KGHM Group closed 2021 with high adjusted EBITDA of PLN 10.3 billion. Net assets rose compared to 2020 by PLN 6.1 billion, reaching at the end of 2021 the level of PLN 27.1 billion. This was due among others to higher revenues resulting from more favourable metals prices and lower costs of goods sold, as well as effective management.
The KGHM Group ended the past year with a very high consolidated net profit – the second-highest in history – which rose by 242.5% versus 2020 and amounted to PLN 6.2 billion. The separate profit for the period of KGHM rose by 190.6% and amounted to PLN 5.2 billion.
International projects with positive results
In Sierra Gorda both payable copper production was higher (+28 proc.), as well as operating profit in the amount of PLN 3.2 billion (an increase of nearly 2.5-times for the 55% interest held by KGHM Polska Miedź). The financial condition of KGHM’s Chilean investment provided the opportunity, for the first time in history, to return cash flow to the Parent Entity.
Safety at the highest level
Despite the threat posed by the pandemic, the number of workplace accidents in KGHM fell from 213 in 2020 to 165 at the end of 2021. The largest decrease was in the number of accidents caused by a lack of caution.
KGHM in 2021 recorded a record-low LTIFRKGHM (Lost Time Injury Frequency Rate KGHM) ratio. The ratio was recorded at 5.63, or a decrease by 23% compared to 2020 and 70% lower compared to the level recorded in 2010.
Strategy and Climate Policy
In 2021 the Management Board of KGHM adopted a Climate Policy, followed by an update to the Company’s strategy, adding to the existing 4Es (Elasticity/flexibility, Efficiency, Ecology and e-Industry), another one, Energy. This is an element of the Company’s investment plans connected with the green transformation. The Climate Policy involves the reduction of greenhouse gases and achieving climate neutrality by 2050.
KGHM’s ambition is to effectively increase the share of renewable energy sources and to generate our own to cover our energy needs. The Company possesses its own low-emissions generating sources fired by natural gas. RES projects are also being developed, including photovoltaic power plants on land belonging to KGHM.
One of the key projects of KGHM will be the implementation of Small Modular Reactor (SMR) technology. The Company signed an agreement in this regards with an American supplier of this technology, the company NuScale Power. KGHM also joined a sector agreement to develop off-shore wind power. The Company is likewise committed to building the Lower Silesia Hydrogen Valley, seeing the potential to utilise hydrogen, among others in our metallurgical plants.
A good neighbour
In 2021 KGHM continued actions connected with counteracting the coronavirus pandemic. Mobile vaccination points were organised at the divisions not only for employees but also their families, friends and the people of the Copper Basin. Several thousand people took advantage of this opportunity.
Due to the situation in Ukraine, KGHM is currently supporting assistance campaigns, both through its own volunteers as well as through the KGHM Foundation. The Company’s employees are taking refugees into their homes, organising collections of donated supplies as well as blood collection drives. The Company has sent transports of medicines and medical supplies to Ukraine.
