Throughout last year the JSW Group grappled with the prices for its flagship product, namely coking coal, which were at their lowest levels in years. The average coal sale price for the full year of 2014 was one-eighth lower than a year ago. Further price decline is expected in H1 2015 with a price rebound in the quotations for this commodity to take place in the latter half of the year.

JSW enlarged its resource base chiefly with coking coal by acquiring the Knurów-Szczygłowice Mine. On top of that, the company had to overcome the unexpected geological difficulties it encountered in the second quarter. As an outcome of intensifying work, daily output in the latter half of the year attained a high level that outdistanced the level seen in the last several years. Last year coke production surpassed 4 million tons and was higher than in 2013. The JSW Group carried out investments worth nearly PLN 1.7 billion.

The JSW Group’s top line revenues were PLN 6,814.9 million in 2014 with operating profit plus depreciation and amortization (EBITDA) at PLN 528.5 million. The low price coking coal environment that persisted throughout last year translated directly into the net result. The company recorded a loss of PLN 657.1 million.

“Last year the macroeconomic environment which was beyond our control and was exceptionally unfavorable to us. Coking coal prices - albeit already low - continued to plunge. We had to respond by launching extensive cost-side changes in the company. We are fully aware that this is merely the beginning of the path but we hope to implement the arrangements made with the trade unions smoothly”, says Jerzy Borecki, JSW’s Acting CEO. 

2014 initiated the process of profoundly restructuring the entire JSW Group, especially in the area of optimizing the costs burdening the company’s results and more tightly linking the compensation system to productivity. This program is being continued in 2015 to guarantee the company’s stable development, to retain jobs and to prepare new longwalls to mine in upcoming years by pursuing the optimum investment policy.

“It is understandable to the staff and the shareholders that to preserve our market position and retain jobs we must slash costs radically and permanently and re-align our capital expenditures to enable us to survive another challenging period and achieve the fundamental objective for this year, namely to be cash flow neutral”, emphasizes Robert Kozłowski, JSW’s CFO and Vice-President responsible for economic affairs.