Net income of Polish mines is halved

APA - Austria Presse Agentur
12-12-2006, 11:09

Warsaw (Puls Biznesu) – Although the Polish coal mines had some net income in the first ten months of the year, they earn less and less.

Warsaw (Puls Biznesu) – Although the Polish coal mines had some net income in the first ten months of the year, they earn less and less.

In the January-October period, the coal mining sector had PLN 849.6m (EUR 222.6m) of profit on sales this year, or PLN 985.1m less than last year. The net income dropped by PLN 479m to PLN 513.1m.

“It is still an acceptable result. The most important thing is that the mines generate some income”, Janusz Olszowski, the CEO of the Mining Chamber of Trade and Industry (GIPH) commented.

There are 3.9m tons of coal left, an amount equal to annual production of two middle-sized coal mines. Warm autumn disturbed the seasonal sales increase. In addition, 2,147 miners with a right to retire, do not want to give up working.  

Debts are yet another problem of the Polish mines. At the end of October, the sector had PLN 5.7 billion of debts, with Kompania Weglowa (KW) responsible for PLN 4.4 billion. The biggest coal producer in Europe consisting of 17 mines, including Halemba where the accident took place in November, estimates that the tragedy will cost about PLN 80m. At the end of October, KW had PLN 105.5m of profit on sales and PLN 20.5m of net income. Before, Grzegorz Pawlaszek, KW CEO, had forecast PLN 50m of net income this year.  

Experts blame decreasing coal prices for the situation. According to the Ministry of Economy, coke coal price used at steel production has fallen 24 percent last year, which adversely affected JSW, a group of five mines. The net income at the end of October amounted to PLN 302.2m, half of the result generated last year. Meanwhile, the company plans to invest over PLN 3 billion in upcoming years. The management want to raise part of these funds on the Warsaw Stock Exchange.

(PLN 1 = EUR 0.262)

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Podpis: APA - Austria Presse Agentur

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