NWR - Unaudited Q1 2015 Results
Q1 2015 Financial summary
- Revenues of EUR 135 million, down 22%.
- Coking coal average realised price of EUR 90/t, down 1%;
- Thermal coal average realised price of EUR 56/t, down 7%.
- Cash mining unit costs of EUR 71/t, up 7% on 20% lower production. On target for mid EUR 60's for FY 2015.
- Selling and administrative expenses down 25% to EUR 25 million.
- EBITDA of EUR (2) million, representing a decrease of EUR 15 million.
- Non-cash gain of EUR 49 million on fair value revaluation of mandatory convertible notes.
- Basic earnings per A share of 0.37 eurocents.
- Net debt of EUR 278 million, including cash of EUR 84 million as of 31 March 2015.
Q1 2015 Operational summary
- Regrettably, one miner lost his life during Q1 2015.
- Safety metrics LTIFR of 6.36 vs. 8.18 in FY 2014.
- Coal production of 1.8Mt, down 20% and coal sales of 1.6Mt, down 18%.
- Coal sales mix of 64% coking coal and 36% thermal coal.
- CAPEX of EUR 15 million, up 24%.
- Coal Inventory of 875kt, up 26% year on year.
- Total headcount including contractors down 3%.
2015 Prices and targets
- Average price for 74% of 2015 expected coking coal production agreed at EUR 93/t.
- Average price for thermal coal production agreed at EUR 52/t.
- Production and sales volume of 7.5 - 8.0Mt and 8.0Mt respectively.
- 60% coking coal in the sales mix.
- Cash mining unit costs of around EUR 65 per tonne.
- CAPEX of EUR 30-40 million.
- Improvement in LTIFR towards the target of below 5.
The coal market has remained challenging throughout the first quarter of this year but I am pleased to report that New World Resources performed in line with, and by some parameters ahead of, the budgetary targets that we set ourselves, and that we are on track to reach our full-year targets.
Our safety performance in the first three months of this year improved by 22% against last year, with 6.36 lost-time injuries per million hours worked. This is testament to our safety-first policy, and moves us towards our LTIFR target of below 5. Sadly, however, I must report the loss of one of our colleagues at the Karvina mine, and on behalf of everyone at NWR I extend sincere condolences to his family and friends.
NWR generated revenues of EUR 135 million in the first quarter of this year, 22% down year on year as a result of lower sales prices for our coal and lower volumes sold. We produced 1.8Mt of coal in the first quarter, and we are on track to achieve our full-year production target of 7.5 - 8.0Mt.
Cash mining costs per tonne, at EUR 71, were 7% up year-on-year on 20% lower production. We remain on track with our full-year forecast. Selling and administrative expenses were down 25% to EUR 25 million. This cost performance reflects our ongoing commitment to cost discipline.
Although the global spot prices for coking coal have continued their downward trend this year, NWR's exposure to that price development has been limited by the fact that our coking coal prices are largely locked-in for the year at an average of EUR 93 per tonne. Concurrently, we are in early-stage talks to potential investors about refinancing our EUR 35 million SSF, and have appointed a financial advisor to assist in the process.
As these results clearly indicate, the market environment in which coal companies operate continues to be extremely difficult and our business remains under pressure. However, as we move through the year our production rate is expected to increase while we remain fully focused on safety and cost management.
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