Release Date: March 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- KGHM Polska Miedz SA reported a 25% increase in adjusted EBITDA for 2024, reaching PLN4.4 billion.
- The company achieved a 58% increase in adjusted EBITDA for the group, totaling PLN8.457 billion.
- Copper and silver prices increased by 8% and 21% respectively in dollar terms, positively impacting revenues.
- The company successfully managed to reduce costs, achieving a negative cost increase of 2% year-on-year.
- KGHM Polska Miedz SA maintained a strong financial position, with stable liquidity and a favorable debt-to-EBITDA ratio.
Negative Points
- The company faced significant challenges with water-related threats, particularly concerning the Odra River and golden algae.
- There were issues with past acquisitions of photovoltaic farms, which were not carried out optimally, affecting diversification of energy sources.
- Staff turnover was high, leading to significant costs for severance payments and non-competition agreements.
- The Robinson mine experienced serious operational issues in 2023, impacting production and planning.
- The Victoria project in Canada faced budget overruns and planning challenges, raising concerns about its profitability.
Q & A Highlights
Q: Are the current deposits in Poland sufficient to maintain KGHM Polska's business over the next 15 years, or will expansion beyond the Odra River be necessary?
A: Andrzej Szydlo, CEO, explained that while the current deposits will suffice for the near future, KGHM will eventually need to expand beyond the Odra River. This expansion will require significant investment, and the company is considering its long-term strategy, which includes potential changes to its dividend policy to support future growth.
Q: What is the status of the Victoria project, and what are the expected costs and timeline for its completion?
A: Andrzej Szydlo, CEO, clarified that the Victoria project is an underground mine with a target depth of 1.8 kilometers. The project is being optimized to manage risks and costs, with a completion target around 2028-2029. The total investment is expected to be lower than the previously mentioned $1.6 billion.
Q: How does KGHM plan to manage its energy needs, particularly regarding SMRs and nuclear power?
A: Andrzej Szydlo, CEO, stated that while SMRs are not currently competitive for power generation, KGHM is open to exploring synergies with nuclear power for stability and efficiency. The company is considering various energy solutions, including SMRs, as part of its long-term strategy.
Q: What are the plans for the Robinson mine, and how does KGHM manage its concentrate sales?
A: Iga Dorota Lis, Vice President for International Assets, indicated that Robinson mine's operations could extend to the late 2030s, depending on copper prices. The concentrate is sold globally, and KGHM actively manages its sales strategy to optimize returns.
Q: How does KGHM view the Critical Raw Materials Act, and what opportunities does it present?
A: Andrzej Szydlo, CEO, expressed that while the Act is a conceptual document, it highlights the importance of copper as a strategic material. KGHM sees potential opportunities but expects more specific directives from the European Commission to fully capitalize on the Act's implications.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
