Coal and coke production was higher than in 2012. The Group’s net result generated in a time of low coal prices on the global markets was in the black amounting to PLN 82.2 million. Capital expenditures were maintained at a high level with PLN 1 757.8 million earmarked for that purpose.
In 2013 JSW’s mines produced more than 13 626 thousand tons of coal, thereby surpassing the plan by 100 thousand tons. In turn, coke production and sales amounted to nearly 4 million tons, exceeding the previous year’s result. The effectiveness of our sales forces enabled the Company last year to sell the largest quantity of coal in more than 10 years. Sales amounting to 14 355 thousand tons outpaced production. The Company sold more than 740 thousand tons of inventory on the market, chiefly coking coal.
Sales revenues in the 12 months of 2013 were PLN 7 632.2 million, down 13.5% compared to the analogous period in the previous year, mostly on account of the coking coal price decline of nearly 25%. EBITDA was PLN 1 403.4 million (compared to PLN 2 374.8 million in 2012).
“The 2013 results clearly show that the market context for mining companies remained unfavorable in terms of coal, coke and steel prices. However, it is with satisfaction that I can state that despite extremely demanding macroeconomic conditions and the decline in coal prices, we proved ourselves to be effective in our operations, with both the Company and the Capital Group closing the most recent twelve-month period in the black. Our result demonstrates in a measurable and unambiguous manner that our strategy has been properly defined and that it has been executed effectively”, says Jarosław Zagórowski, CEO of JSW.
The Group’s coal production was 1.2% higher in 2013 than in the previous year. Coal sales to external customers was up nearly 12% compared to 2012; they purchased 9 174.6 thousand tons of coal. In turn, customers belonging to the Capital Group purchased 5 181.2 thousand tons in 2013, 15.8% more than in 2012 when they purchased 4 476.1 thousand tons. Total revenues on the sales of coal to external customers in the four quarters of 2013 were PLN 3 559 million, down by 13.9% compared to the analogous period in 2012.
“The most important thing for us was to introduce and observe production, sales and cost discipline. We are fully aware that had it not been for our determination and focus in our operations in 2013 we would not currently have the opportunities to pursue investments and the unfettered perspective of executing a project related to the planned acquisition of KWK „Knurów-Szczygłowice”, adds Jarosław Zagórowski.
In comparison to the four quarters of 2012, coke production grew by 2.4% from January to December 2013. Sales in tons in this same period rose by 5% to 3 940 thousand tons. In 2012, 3 752.7 thousand tons were sold. However, on account of the more than 20% decline in the average coke sales price, coke sales revenues to external customers were also down (calculated jointly with hydrocarbons). In 2013, they were PLN 3 704.3 million, down by 14% compared to 2012.
In 2013 the Group maintained a high level of capital expenditures, in particular to ensure coal mining from new levels and to enhance the safety of underground miners. The amount spent on investments was PLN 1 757.8 million, a mere 3.2% less than in 2012 when capital expenditures were PLN 1 816.7 million.
Some of the more important actions taken to strengthen effectiveness in executing the Company’s strategy include JSW obtaining a concession to mine hard coal and methane in KWK „Krupiński” until the end of 2030, commencing work to open up „Pawłowice 1”, a new coking coal deposit in KWK „Pniówek” and making the decision to expand and modernize the wash plant in KWK „Budryk” to procure fine grade coking coal.
To improve the Group’s operating effectiveness and thereby to augment its market competitiveness, the coking sector was integrated by creating the company JSW Koks SA. This process enabled the coking plants to enhance their operating effectiveness with substantially lower costs and to focus on their fundamental functions, i.e. to improve the quality of production and technical and technological development. The new company’s production potential is nearly 4 million tons of coke per annum. This means more than 5 million tons of coking coal to be used annually in the production process.
In parallel, JSW unwaveringly pursued its investment program related to the power sector. The overall JSW Group’s energy security is guaranteed by having properly defined the growth policy for SEJ, i.e. Spółka Energetyczna „Jastrzębie”, where the investments under way will ultimately facilitate the maximum utilization of the fuel base, in particular, low calorific coal, coal sludge and methane, which currently are frequently treated as waste.