Stable increase in production and results – KGHM presents its results for the first 9 months of 2024

KGHM ended the first 9 months of 2024 with a clear increase in production and revenues. Copper production by the KGHM Polska Miedź S.A. Group reached 544 thousand tonnes, or 3 percent more than in the comparable period of 2023, while revenues rose by 2%. The copper company also recorded higher adjusted EBITDA, on both a consolidated and standalone basis.

“The well prepared and conducted maintenance shutdown (carried out in a 4-year cycle) at the largest metallurgical facility of KGHM, despite its scale, did not affect the level of electrolytic copper production. This was possible thanks not only to the technical preparations but also to the build-up of anode inventories in prior quarters). Maintaining a maximum level of production in the domestic assets given existing production capacities, along with a slight increase in production of copper in concentrate and higher copper production by the international assets, led to the increase in production by the entire Group during the reported period,” said Andrzej Szydło, president of the Management Board of KGHM Polska Miedź S.A.

Solid operating and financial results by the KGHM Group

The financial results of the KGHM Group for the first 9 months of 2024, compared to the same period of 2023, were marked by higher production and higher operating and net results. Consolidated revenues rose by 2% (PLN 491 million) while adjusted EBITDA increased by 44 percent, reaching PLN 6.2 billion. To a large extent these results were impacted by the improvement in operating parameters of the Robinson mine, the effective management of operating costs, including costs of fuels and technological materials, and by high realised sales prices due to the increase in copper and silver prices, as well as a result of the realisation of instruments hedging metals prices.

Group profit amounted to PLN 1 314 million. The increase in consolidated profit year-to-year by 57% was mainly thanks to the improved EBITDA in the segment KGHM INTERNATIONAL LTD. and to a lesser degree in KGHM Polska Miedź S.A.

Investing in innovation and safety

KGHM increased investment expenditures to PLN 2.52 billion, or an increase by 16% versus the prior year. These funds were used to develop infrastructure, enhance efficiency and increase operating safety, among others by modernising the metallurgical facilities and mines. The Group’s companies are advancing exploration projects in Poland involving exploring for and assessing copper ore deposits as well as development projects in the assets outside Poland.

In terms of investment activities, KGHM is continuing to advance its Deposit Access Program, comprising over 30 km of new mine corridors in the Rudna and Polkowice-Sieroszowice mines. Also, further work was carried out to develop the Żelazny Most Tailings Storage Facility. Abroad, KGHM is developing the Victoria project in Canada, while the Sierra Gorda mine is entirely powered by renewable energy sources.

The maintenance shutdown at the Głogów I Copper Smelter was completed, including among others modernisation of the flash furnace and electric furnace, the sulphuric acid plant and the updating of control systems. The maintenance shutdown was completed five days ahead of schedule.

Safe financial situation

The KGHM Group has a high level of financial liquidity and a stable level of debt. The net debt to EBITDA ratio is 0.9, which testifies to the effective control of debt and risk management. Moreover, the Group reduced operating costs and improved productivity, which had a positive impact on the Group’s operating and financial results.

“We maintain ongoing observation of currency movements and changes in commodities prices. The lower prices of copper in the third quarter of 2024, especially as denominated in PLN, did not have a substantial impact on the results, due to the decrease in operating costs,” added Andrzej Szydło.

Focus on development

Sustainable development, efficiency and operational profitability and actions to protect the environment are priorities for KGHM. The copper company is implementing projects in its core business, projects supporting environmental safety and is developing infrastructure to restrict the threat of water infiltration, including a project involving building a retention reservoir in closed sections of the Lubin mine.

KGHM is consistently developing initiatives in line with the highest ESG standards. To minimise its environmental impact, KGHM prepared calculations of its Scope 1, 2 and 3 greenhouse gas emissions for the Group for 2023 along with reports on CO₂ emissions in accordance with the requirements of the emissions rights trading system.

KGHM is also increasing the share of renewable energy sources (RES) in its activities, thereby pursuing the goals of its climate strategy. In the first three quarters of 2024, 428 GWh, or 19.93 percent of the needs of KGHM Polska Miedź S.A. for power, were provided by its own sources. The projects being advanced in this regard are aimed at further restriction of emissions and ensuring energy independence by KGHM.

“The Company is close to completing work on its long-term Strategy, which is focused on guaranteeing stable operating conditions in mining, ore processing and metallurgy, including support of the core business and a cost-effective, climate-neutral energy component. The goal is to strengthen the Group by adapting its strategic and operational activities to the volatile conditions in the mining sector and its associated environment, as well as to take advantage of opportunities and mitigate threats, and to improve productivity and reduce costs,” concluded Andrzej Szydło, president of the Management Board of KGHM Polska Miedź S.A.

The Company is also continuuing investments in R&D, in particular searching for innovations which support the core production business and optimising the portfolio of companies supporting the operations of the KGHM Group.