The positive result in the first quarter was driven primarily by a consistent coal and coke production policy and an active sales policy. Despite declining prices, the Company managed to generate sales revenues almost 15% higher than in Q4 2012. This was achieved as a result of a higher volume of coal (+15%) and coke (+27%) sales and high revenues on sales of hydrocarbons. Also, first quarter results were not affected by any one-off events, as was the case in Q4 2012. In the period from January to the end of March, the Group reduced coal inventory levels by over 300 thousand tons (over 20%) and coke inventories by over 100 thousand tons (nearly 30%).
“The first quarter results are really satisfactory. They validate our long-term strategy and confirm the effectiveness of the Group's management in these especially tough economic conditions in Poland and Europe. Despite these difficult market conditions, we sold our current production and inventories,” said Jarosław Zagórowski, the CEO of JSW S.A. “I'm afraid, however, that such performance may be difficult to achieve in the upcoming quarters. The Company's performance is strongly affected by whether conditions improve in the European economy, especially in the metallurgical and steel segment. Unfortunately, despite earlier expectations, circumstances on the European steel market have not improved. Moreover, the European Steel Association Eurofer reduced its steel consumption forecasts due to the faster than expected decline in global economic growth since the end of 2012.”
In Q1 2013 EBITDA was PLN 490.8 million. This is twice as much as in Q4 2012 and was achieved despite the coking coal sales price being 2.8% lower, the steam coal sales price being 5.5% lower and the coke sales price being 4% lower.
The Group’s coal production in Q1 2013 was 3,524.9 thousand tons. This was 7.9% more than in the previous quarter. The level of coking coal production has exceeded the production level in Q1 2012. Total sales revenues of coal to external clients after 3 months of 2013 have reached PLN 1,007.4 million and were 9.6% higher than in Q4 2012. External clients purchased 2,477.5 thousand tons of coal (15.4% more than in the previous quarter) and Capital Group buyers purchased 1,361.1 thousand tons (21.2% more than in Q4 2012).
In the coke segment, coke production in the first quarter was 1,025.9 thousand tons, making it more than 15% higher than in the last 3 months of the previous year. This performance was achieved even though battery no. 4 in the Group's Koksownia Przyjaźń coking plant was decommissioned in Q4 2012. Sales in Q1 2013 reached 1,115.3 thousand tons, which ranks among the top quarterly performances in the Group's history. This was 27.9% more than in the previous quarter when 872.2 thousand tons were sold. Revenues on the sales of coke and hydrocarbons were PLN 1,046.5 million, i.e. 21.2% more than in Q4 2012.
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The JSW Group is the largest producer of high quality hard coking coal and a significant producer of coke in the European Union measured by production volume. JSW Group’s core business comprises the production and sale of coking coal and steam coal and the production and sale of coke and coal derivatives. Coal extracted by the JSW Group, mainly coking coal, is used in Central Europe by local steel mills owned by international steel producers and regional utilities. The high-quality coke produced by the Group is also sold on the global market. The main customers of the JSW Group’s products are from Poland, Germany, Austria, the Czech Republic, Slovakia, Romania and Hungary.