Management Board Report on the activity of the JSW S.A. for 2012

3.2.4. Profitability

    2012 2011
(restated data)
Growth rate
EBITDA Operating result + Depreciation 2,087.8 3,359.2 62.2%
Gross margin Gross result on sales x 100
Sales revenues
23.4% 39.5% 59.2%
EBIT margin Operating result x 100
Sales revenues
14.7% 33.6% 43.8%
EBITDA margin EBITDA x 100
Sales revenues
23.9% 42.2% 56.6%
Net return on sales Net financial result x 100
Sales revenues
11.4% 25.9% 44.0%
Return on Assets (ROA) Net financial result x 100
Total assets
8.0% 17.7% 45.2%
Return on Equity (ROE) Net financial result x 100
Equity
12.8% 27.2% 47.1%

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Analysis of profitability ratios indicates a lower efficiency of the Company’s performance in 2012 caused by the economic slowdown resulting in a decrease in unit prices of coal and lower income from sales of coal.

The EBITDA indicator for 2012 was PLN 2,087.8 million compared to PLN 3,359.2 million in 2011, down by 37.8%. EBITDA was generated in 61.4% from the operating profit while 38.6% came from depreciation. In 2011, these shares were 79.6% and 20.4%, respectively. The EBITDA margin for 2012 decreased by 18.3 percentage points from 42.2% in 2011 to 23.9% in 2012. On the other hand, in 2012 the EBIT margin was 14.7% which means that with respect to JSW S.A.'s core business, each PLN 1 million of sales revenues generated approx. PLN 147 thousand in operating profit. Net sales profitability in 2012 was at the level of 11.4%, down by 14.5 percentage points from 2011. In 2012, the return on assets (ROA) and return on equity (ROE) ratios indicated a decrease, compared to 2011, in the efficiency of the Company’s utilization of assets and equity.