In the first half of this year coal production climbed 13.4% compared to the same period in 2011. The Group’s coke production also surged upward – by more than 36% – following the incorporation of KK Zabrze and WZK Victoria, which contributed to achieving that result.

“H1 2012 results are satisfactory, especially when considering the receding prices on the coal and coke markets at the end of the second quarter. Our company’s coal and coke output exceeded our technical plan”, says Jarosław Zagórowski, CEO of JSW S.A. and adds: ”All the available signs indicate that the latter half of this year will be even tougher for the mining sector. Economic slowdown will probably not bypass Poland while the current market prices for coal and coke are definitely less favorable than in the same period last year”.

In H1 2012 sales revenues were down 0.5% compared to H1 2011. The revenue falloff was relatively inconsequential as a result of the incorporation of PEC, KK Zabrze and WZK Victoria. At the same time, the tight conditions on the coal and coke market led to higher inventory levels.

„Q1 witnessed inventory growth; in turn, Q2 did not entail considerable inventory growth. At present, we are not stockpiling inventories but the sell-off process is taking longer than we anticipated as a result of the downturn in the steel industry and tougher circumstances on the European steel market. The steel sector is our key partner. Faced with the possibility of further deterioration in its outlook until the end of the year, we are concentrating on enhancing productivity and actively searching for new international customers”, says Jarosław Zagórowski.

One of the key measures taken to secure the company’s future was signing a letter of intent with ArcelorMittal Poland to extend hitherto cooperation in supplying coking coal, coke and coking gas.

For JSW, Q2 2012 marked continuation of extensive investments launched in the first three months of the year. The Group’s overall capital expenditures in the first half of the year were PLN 821.4 million while they were only PLN 1,498.4 million in all of 2011. Among others, the Company purchased an automated longwall system for KWK „Pniówek” with double the wallface output and a two-channel communication system to register every event. In turn, one of the most modern coking gas treatment installations in Europe was installed at WZK Victoria. Moreover, JSW procured a concession to mine coal in the „Pawłowice I” deposit until 31 December 2051.

In the coal segment PLN 721.0 million was earmarked for investments, compared to PLN 1,294.1 million in all of 2011. In the coke segment investments amounted to PLN 61.7 million, more than 26% higher than in H1 2011 (total investments in all of 2011 were PLN 88.6 million). All the investments in H1 2012 were executed according to plan and took into account the incorporation of KK Zabrze and WZK Victoria in the Group as well as preparing the mines’ required output capacities in upcoming years.