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In Q3 JSW sees the first effects of its restructuring efforts

|   Investors Relations - common

Despite the persisting significant decline in global coking coal and steam coal prices Jastrzębska Spółka Węglowa has not abandoned its efforts to enhance performance. The Company commanded coal sales prices from its clients above the pertinent benchmarks. Production volume and coals sales were at a robust level.

[Translate to English:] fot. Dawid Lach


Both coal and coke production costs have been reduced markedly compared to the previous quarter following effective operational measures and ongoing optimization of expenditures.

Jastrzębska Spółka Węglowa’s mines produced more than 4.12 m tons of coal, with 2.88 m tons of coking coal and 1.24 m tons of steam coal in Q3. During this period geological problems were encountered in the Krupiński mine and in the Zofiówka and Jas-Mos sections of the Borynia-Zofiówka-Jastrzębie mine. Maintaining the level of output and discipline in pursuing the savings program has facilitated further reduction in the unit coal mining cash cost. In Q3 it fell below PLN 300 per ton to PLN 298.37. It is down 2.6% from Q2 when it was PLN 306.22.

The global hard coking coal contract price plummeted by USD 16.5 to USD 93 per ton in Q3 compared to Q2 while the semi-soft coal price fell by USD 7 to USD 74 per ton. By implementing a pro-active sales policy the Company partially amortized this decline commanding an average coking coal sales price of USD 96, coming in above benchmark prices. 

“The third quarter once again yielded a drastic decline in global coking coal prices. That is why our objective is to continue the process of cutting costs and concentrating on the most developmental areas. JSW’s Q3 results confirm that the measures taken to-date have been effective. They also confirm the employees’ commitment to the process of curing the Company. We are all aware that the lower our costs will be, the greater our chances of getting through this tough period”, says Tomasz Gawlik, Vice-President of the JSW Management Board in charge of Strategy. 

The coke segment has posted robust results for yet another quarter in a row. Production edged up by 2.5% in Q3, sales surged up by nearly 13% and revenues on the sales of coke and hydrocarbons to external clients climbed 7.4% above Q2 of this year. The unit coke conversion cost was cut by 7.6% to PLN 136.11 per ton. In Q2 the unit cost was PLN 147.30.

Operating profit plus depreciation and amortization (EBITDA) was PLN 364.4 million in Q3 compared to a negative EBITDA of PLN 94.2 million one quarter ago. Reversal of the provision for the Company Social Benefit Fund contributed to improving the result in Q3 of this year.