The unit mining cash cost reached the lowest level in several quarters. The significant deterioration of JSW Group’s net result reported in Q4 2015 was a consequence of taking significant impairment charges on assets.Jastrzębska Spółka Węglowa’s mines produced more than 4.42 m tons of coal, with 2.80 m tons of coking coal and 1.62 m tons of steam coal in Q4 2015. Thanks to the consistent implementation of the production optimization program, the Company continued the further reduction in the unit coal mining cash cost. In Q4 it fell by as much as 5% compared to Q3, down to PLN 283.60 per ton.
In Q4 2015, coal sales to external customers surged by more than 25% quarter to quarter and reached over 3.30 million tons. Despite the reduction of average selling price to external customers, the Company earned sales revenues that were more than 12% higher than in Q3 2015. In Q4, coal inventories fell by more than 300 thousand tons compared to the previous quarter.
In the coke segment, production in Q4 was kept at the level similar to Q3. Coke sales however were more than 11% below the sales recorded in the previous quarter, causing revenues to decline by the same rate.
“In the final months of 2015, we witnessed further decreases in global coking coal prices. This was reflected in our financial performance in the fourth quarter. The savings and optimization measures we have taken are effective, but the critically low benchmark levels work against us. The reported result for the last quarter is also heavily encumbered by non-cash accounting charges” said Tomasz Gawlik, the President of the JSW SA Management Board.
Because of the need to recognize impairment charges, the net loss in Q4 2015 reached PLN 2.54 billion. In Q4, EBITDA net of impairment charges was PLN 61.3 million, however it was minus PLN 2.76 million when the charges were included. The total amount of impairment charges made in Q4 for non-financial assets recognized in the operating result was over PLN 2.83 billion. The impairment charges affected the assets in the coal, coke and power segments.