The course of this year’s price negotiations with ENEA was the same as in previous years. In accordance with the long-standing practice, the last round was planned for October. In previous years, an agreement on the prices for the following year was usually reached in the fourth quarter. Therefore, the termination surprised us. [...]
Bogdanka in the first half of 2015: results under strong pressure from complicated market situation, with reduction in costs and capital expenditures
The Lubelski Węgiel BOGDANKA Capital Group, headed by LW BOGDANKA S.A., the most modern and efficient coal mine in Poland, generated sales revenue in the 1st half of 2015 of PLN 843.6m (10.8% less than in the same period of the previous year). EBITDA was PLN 291.8m, EBIT was PLN 101.3m, and net profit was PLN 75.5m. In the 2nd quarter alone, despite consolidated revenue of PLN 415.3m, 10.5% less year-on-year, the LW Bogdanka Capital Group generated results at the level of EBITDA, EBIT and net profit better than those achieved in 2nd quarter of 2014 and in the 1st quarter of 2015, with EBITDA of PLN 147.4m, EBIT PLN 53.2m, and net profit PLN 42.8m.
LW Bogdanka S.A. extracts 1.90 million tonnes of coal in the second quarter and upholds the plan to sell 8.5 million tonnes of coal in 2015
Lubelski Węgiel BOGDANKA S.A., the most advanced and effective hard coal mine in Poland, produced 1.90 million tonnes of commercial coal in the second quarter of 2015, compared to 1.99 million tonnes achieved in the first quarter of 2015, and 2.02 million tonnes in the second quarter of 2014. The level of sales in the second quarter of 2015 totalled 1.88 million tonnes, as compared to 1.95 million tonnes in the first quarter of 2015 and 2.10 million tonnes in the second quarter of 2014. Cumulatively, production of commercial coal in the first half of the year amounted to 3.89 million tonnes, while sales totalled 3.82 million tonnes, as compared to 4.25 million tonnes and 4.33 million tonnes in the same period of 2014, respectively. Lower extraction and sales of coal is connected with continued market difficulties and oversupply of coal on the Polish market.
The situation on the Polish coal market continues to worsen. This is connected with a continuing oversupply of coal and the aggressive price policy of the government-subsidized Kompania Węglowa. A consequence of these factors is the threat of a reduction in the volume of sales to Bogdanka’s customers in 2015 and perhaps over a longer perspective. At this time we estimate our sales capacity for this year at 8.5 million tonnes, which is much less than our production capacity.
Bogdanka insists that the President of the Office of Competition and Consumer Protection initiated proceedings related to the application of prohibited business practices by Kompania Węglowa
LW BOGDANKA S.A., the most modern and most effective hard coal mine in Poland, moved to the President of the Office of Competition and Consumer Protection for the initiation of proceedings related to the Kompania Węglowa S.A.’s application of prohibited business practices limiting competition.
In the opinion of the Company, the activity of Kompania Węglowa S.A., involving the sale of coal below costs of extraction, violates the regulations related to competition protection, as well as can be qualified as acts of unfair competition.