KGHM to decrease production

opublikowano: 12-03-2008, 10:25

Warsaw (Puls Biznesu) – The management explains that production decrease will be caused by the fact that the company must be closed on Sundays. Meanwhile, production costs and wages of CEOs keep growing.

Today, the supervisory board of KGHM will approve of 2008 budget and 2008-12 plans. The company will forecast PLN 3bn (EUR 845.1m) of net income, average copper price at USD 7,100 per ton and USD/PLN exchange rate at 2.5.

“In my opinion, the rate will amount to 2.43. As far as copper price is concerned, I estimate it will amount to 7,850 per ton. The management’s forecast is very careful”, Grzegorz Litynski, KBC Securities analyst said.

Analysts are worried that copper production will fall further. In 2007, the company produced 451,900 tons of copper, or 45,300 tons less than in 2006. The management’s explanation for that was that the company did not work on Sundays.

“This should be worrying for investors, especially that the trend will continue in upcoming years. Changing the system of work will decrease production by 7 percent in 2008”, Pawel Puchalski, DM BZ WBK analyst said.

Investors won’t like cost analysis as well. In 2007, it cost PLN 11,160 to produce copper, or PLN 663 (6 percent) per ton more than a year earlier. CEOs’ wages cost PLN 4.1m last year. Krzysztof Skora and Maksymilian Bylicki, ex-CEOs earned PLN 949,000 each, up from PLN 668,000 and PLN 685,000 in 2006.

(PLN 1 = EUR 0.282)

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