Layers of possibilities Group results for 2014 16 March 2015
Cautionary Statement This presentation was prepared by KGHM Polska Mied S.A. (KGHM). The presentation is strictly of an informational nature and should not be construed as containing investment advice. The users of this…
2014 Highlights Key accomplishments Commissioning of the Sierra Gorda mine 1 Strategy adopted for the years 2015-2020 with an outlook to 2040 Target production: over 1 million tonnes CuEq Financing secured for development…
1 New Strategy for 20152020 with an outlook to 2040 Build the shareholder value of the KGHM Group based on a clear path of global Produce over 1 million tonnes of copper growth equivalent and enhance efficiencies Resource Base…
2 Sierra Gorda full production capacity to be reached by mid-2015 Sierra Gorda Cu Mo Au Status Average 220 kt Cu annual 25 mn lbs Mo* production 64 kt Au Average daily ore processing is as planned (Phases I & II) at approx.…
2 Sierra Gorda promising results from near-mine exploration Pampa Lina Drilling rig in the Pampa Lina exploration zone Areas adjacent to the current mine have substantial exploration potential. 6
3 Deep Gogw guarantee of stable production GGP Cu Ag Status 290 Mt Resources 2.4% Cu, 79 g/t Ag On 1 April 2014 the first mining section in Deep Gogw was opened through the Rudna mine. Ownership 100% KGHM By the end of Q4 2014…
Gaworzyce-Radwanice 4 another 4 million tonnes of copper in Poland Gaworzyce- -Radwanice Cu Ag Status 216 Mt Resources 1.89% Cu, 35 g/t Ag Completion of 2008-2014 exploratory work in the concessioned areas Gaworzyce and…
Macroeconomic outlook
The copper downturn not felt equally everywhere The copper market balance is steadily improving Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 USD PLN CLP CNY 800 110 700 Estimated market balance in 2015 (thousand tonnes) 105 600 100 500 95 90…
The US Fed in the spotlight; central banks in various stages of the monetary cycle cause higher currency volatility 180 Dollar index 160 140 120 100 80 60 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 The past…
Economic results KGHM Polska Mied S.A. Group
Metals prices under pressure from a strengthening USD Local currencies partially offsetting volatility Copper price (USD/t) Exchange rate (USD/PLN) Positive data on the Polish The main cause of the copper economy in the first half of…
KGHM Polska Mied S.A. KGHM INTERNATIONAL Copper production by the Group in 2014 similar to that in 2013 Payable copper production (kt) Total Group production of copper equivalent Production of copper equivalent from mined ore*…
The increase in unit C1 cost due to external factors C1 Group C1 KGHM Polska Mied S.A. C1 KGHM INTERNATIONAL The increase in C1 concentrate (USD/lb) (USD/lb) (USD/lb) production cost is mainly related 2,26 2,15 2,14 to a change in…
KGHM Polska Mied S.A. KGHM INTERNATIONAL Other The KGHM Group achieved EBITDA of over PLN 5 billion EBITDA Net debt / EBITDA * (mn PLN) The decrease in Group EBITDA by 11% was mainly due to changes in metals prices 0,82 (Cu…
Economic results KGHM Polska Mied S.A.
Stable mined production, higher metallurgical output Ore extraction Production of Cu Electrolytic copper Metallic silver (mn t dry weight) in concentrate production production (kt) (kt) (t) +1% 30,6 31,0 +8% -2% +2% 1 256 429…
Lower metals prices and lower copper sales led to lower sales revenue by 10% Sales revenue (mn PLN) Copper and copper Silver Other 18 579 products (kt) (t) -10% Silver 1 028 16 633 3 191 945 1 250 1 263 595 2 471 573 Copper…
Cost discipline maintained in every quarter of 2014 After excluding the minerals extraction tax and purchased Cu- -1% bearing materials, expenses by nature were lower by 1% than in 13 254 Total expenses by 2013 (-PLN 42 million) 13…
Higher C1 cost due to external factors C1 cash cost of producing copper in concentrate (USD/lb) The decrease in silver and gold prices +2% 0.02 0.02 as compared to 2013 led to a lower 0.02 valuation of by-products, which resulted…
Financial results of KGHM in line with market consensus EBITDA (mn PLN) Net profit (mn PLN) Net Debt (mn PLN) Net Debt / EBITDA -12% -21% 4 976 2 108 3 058 85 4 363 0,46 2 414 Borrowings 1 123 123 2 023 Cash and cash 0,20…
Lower metals prices were mainly responsible for the lower profit 3 058 -273 2 414 +236 -217 -52 +191 -1 446 +679 -42 +280 Net profit Change in sales Change in prices Change in Hedging Total cost of Minerals Purchased Cu-…
The accrued result on derivatives achieved by KGHM Polska Mied S.A. as at 31 December 2014 amounted to PLN 352 million Market risk management hedged position (as at 31 December 2014) Position in derivatives on the commodities and…
Dividend for 2014
Results-oriented Dividend Policy KGHM Dividend Policy The Dividend Policy of KGHM Polska Mied S.A. is part of its on-going efforts to ensure a balance between dividends paid out to shareholders and opportunities to efficiently…
Recommended profit allocation for 2014 Taking into consideration: the adopted Dividend Policy the assumptions and goals of the Companys Strategy, including necessary expenditures by the Group to accomplish its development program…
Goals and priorities for 2015 Maintain a stable level of copper production Achieve full phase I production capacity at the Sierra Gorda mine (110,000 tonnes of ore throughput per day) and commence molybdenum production…
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