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    KGHM: best financial results since 2011

    A 100% increase in adjusted EBIDTA, a 32% increase in revenue, a 433% increase in net profit and an 8.6% increase in payable copper production relative to the first half of 2020 – these are KGHM’s best results for the first half of the year in a decade, which the group presented on 18 August at the Warsaw Stock Exchange’s Listings Room.

    “These results please our shareholders, which is obvious, but the employees will also benefit from this increase, as they share in the net profit, so their reward will also be greater,” Marcin Chludziński, President of the Management Board of KGHM Polska Miedź S.A., pointed out.


    The net result of PLN 3.7 billion, i.e., PLN 3 billion (more than five times) higher than that recorded in the first half of 2020, was due to an increase in mining and sales and to a higher operating profit margin in all segments of the Group.


    “The increase in smelter production is related to increased processing of scrap metal, entry into the closed-loop economy, and abroad it is primarily an increase in mining at our Sierra Gorda mine in Chile,” said Andrzej Kensbok, KGHM Polska Miedź S.A. Vice President, Finance.


    The Group’s Atacama Desert mine recorded a 30% increase in payable copper production (51 thousand tonnes) compared to H1 2020, driven by both higher mining output and higher copper content in the ore. Sierra Gorda also increased silver production by 25% (15.6 tonnes).


    “We are at a pivotal moment regarding the development of Sierra Gorda. The mine has achieved full financial independence. For the first time, we have positive cash flows into Poland. In the first half of the year, it amounted to almost PLN 500 million” – emphasized Marcin Chludziński


    According to Paweł Gruza, Vice President of the Management Board of KGHM Polska Miedź S.A. for foreign assets, the very good production and financial results at Sierra Gorda and other foreign assets of the company are due in part to the savings program implemented in the first half of 2020, when copper prices dropped significantly.


    “Low prices have forced tough austerity decisions. We managed to maintain this cost discipline through 2020 and we entered the current year with very good cost positions,” explained Paweł Gruza, adding that the savings, combined with an increase in production, the favourable macroeconomic situation and the rising copper prices, transfer into very good financial results.


    According to Marcin Chludziński, thanks to optimisation initiatives it was possible to increase output without large financial outlays. “We create value from what has already been invested,” he said and cited the example of the Sierra Gorda mine, where the expansion of the fleet, which sets the ore to the mill, by several dozen cars transfers into output that is several thousand tons higher.


     According to the CEO of KGHM, the future belongs to copper and silver.


    “The copper price favours us. It is higher than in 2020, 2019 or 2018. And we want to take advantage of this trend. We want to transform the company to respond to this need” – Marcin Chludziński pointed out.


    KGHM is planning to build new mines in Poland in the coming years, the output of which will ensure 20-30 years of work for the company, according to Marcin Chludziński.


     “We have signed agreements with the Ministry of Environment and Climate for mining use for both Bytom Odrzański and Kulow-Luboszyce. And following these agreements, we are preparing for exploration in new areas” – said Adam Bugajczuk, Vice President of the Management Board of KGHM Polska Miedź S.A. for development.


    The copper giant updates its strategy for the coming years. The company’s new strategy assumes transformation towards the exploration of potassium salt deposits, for which there is a very good economic situation, and use of alternative energy sources: photovoltaic, nuclear energy, hydrogen and offshore wind farms.


    In 2030, the company plans to use 50 per cent of its energy from its sources, including RES, which will transfer into a reduction in CO2 emissions by 900,000 tonnes. The Sierra Gorda mine will be powered by 100 per cent RES. In Poland, the Group is building a photovoltaic farm with a capacity of 3.14 MW in Legnica.


    “Transforming a company means responding better to market needs and demand – and therefore better business in the future,” Marcin Chludzinski emphasized.

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