New Wld Res Plc (NWR) - NWR Nine Months 2012 Results RNS Number : 0474R New World Resources Plc 14 November 2012 Amsterdam, 14 November 2012 New World Resources Unaudited interim results for the first nine months of 2012 New World Resources Plc ('NWR' or the 'Company') today announces its financial results for the nine-month period ended 30 September 2012. 9M 2012 Highlights § Revenues of EUR 1,013 million, down 18% § Mining unit costs of EUR 79/t, down 2% § EBITDA of EUR 227 million, down 39% § Net profit of EUR 47 million § Earnings per A share of EUR 0.17 § Net debt of EUR 481 million § Coal production of 8.6Mt, and external sales of 7.2Mt § External sales mix of 53% coking coal, and 47% thermal coal § Coke production of 525kt, and external sales of 432kt § LTIFR at 7.48, an improvement of 6% FY 2012 Outlook § Coal and coke production targets of 11.0-11.1Mt and 700kt, respectively § Coal and coke external sales targets of 10.2-10.3Mt and 600kt respectively § External coal sales expected to be split evenly between coking and thermal coal § Q4 coking coal and coke prices agreed at EUR 102/t and EUR 264/t respectively § Expected flat mining unit costs year-on-year at constant FX § Expected CAPEX of EUR 210-220 million Marek Jelinek, Executive Director and CFO commented on the results: "Trading conditions remained challenging in the third quarter. In an environment where coking coal prices are 30 per cent down year-on-year, our focus will remain on cost containment and watchful management of capital spending in order to ensure we are well positioned for the future. On the operational side, we are pleased to report an improvement in our already strong safety performance. Despite this overall safety improvement, we have lost four of our colleagues at work this year, which is a reminder of the hazardous conditions in which we operate and we continue to drive forward initiatives to reach our goal of zero fatalities. Market conditions continue to be difficult. Although steel production in Central and Eastern Europe remains relatively resilient, demand for steel products has deteriorated, particularly in the car industry in Western Europe. This has forced some steel mills and foundries in our core markets to continue operating at reduced levels. The weakness in the steel industry is having a knock-on effect on steelmaking input raw materials including coking coal. These weak market conditions have been reflected in our pricing for the final quarter of 2012. For the fourth quarter we settled our blended coking coal contracts at EUR 102/t, 20 per cent down on the previous quarter, and our average coke price at EUR 264/t down 8 per cent on the third quarter. Looking ahead, despite some positive signs, we expect the situation in Europe to remain volatile next year and we therefore remain vigilant and are preparing a series of further efficiency measures at our current operations. Primarily, we plan to enhance our cost containment efforts in 2013 and our sustaining CAPEX will be optimised through a mixture of prudent cuts and deferrals. In terms of our development projects, the review of the Polish Debiensko Mine is still underway to provide the Board with updated data on which it will base its decision about the future of the project early next year. On the Czech side of the border, the Karvina Mine expansion is progressing as planned. Longer-term, we remain confident in the resilience of our business, which is underpinned by significant long-standing customer relationships, in a region with the highest proportion of industrial employment in Europe. Although economic growth in key emerging markets such as China or India has moderated, they remain robust as these countries progress with continuing investment in urbanisation, which underpins an improving sentiment towards raw materials for steel production in general." Selected consolidated financial and operational data (EUR m, unless otherwise stated) 9M 2012 9M 2011 Chg Revenues 1,013 1,241 (18%) EBITDA 227 369 (39%) Operating profit 97 235 (59%) Profit for the period 47 121 (61%) Basic earnings per A share (EUR) 0.17 0.45 (62%) Total assets 2,373 2,289 4% Cash and cash equivalents 444 445 0% Net debt 481 400 20% Net working capital 133 130 2% Net cash flow from operations 106 210 (49%) CAPEX 165 156 6% Total headcount incl. contractors 17,786 18,031 (1%) LTIFR 7.48 8.00 (6%) NWR's Revenues were EUR 1,013 million in 9M 2012, EUR 228 million lower than in 9M 2011 mainly due to lower coking coal prices. The lower volume of external coal sales was almost fully offset by an improved coal mix (a greater proportion of higher margin coking coal in the sales mix.) Lower costs and an increase in the level of inventories in 9M 2012 partially offset the impact of lower coking coal and coke prices on EBITDA of EUR 227 million in 9M 2012, a EUR 142 million decrease compared to 9M 2011. Depreciation and amortisation charges remained flat in CZK terms year-on-year and Operating profit for the period was EUR 97 million. Net financial expenses decreased due to a lower net foreign exchange loss, and a higher net profit on derivatives revaluation compared to 9M 2011. The profit before tax was EUR 68 million, EUR 98 million below 9M 2011. The Company's effective tax rate was 30% after 9M 2012 and NWR's consolidated after-tax profit for the period was EUR 47 million, down EUR 74 million versus 9M 2011. The Basic earnings per A share for the nine-month period ended 30 September 2012 were EUR0.17. Operating cash flow before working capital changes was EUR 223 million, EUR 125 million lower than in 9M 2011, mainly reflecting lower revenues. Changes in working capital were negative EUR 43 million primarily due to an increase in inventories of thermal coal. As such Operating cash flow before interest and taxes was EUR 180 million. Net operating cash flow after interest (EUR 32 million) and income tax (EUR 42 million) for 9M 2012 was EUR106 million, EUR 104 million lower than in 9M 2011. NWR's capital expenditure in 9M 2012 was EUR 165 million. This included maintenance CAPEX for both mining and coking segments, mining equipment renewal, vertical and horizontal mine development, safety and expenditure of EUR 5 million on the Debiensko project. No further CAPEX is planned for Debiensko for the rest of 2012 due to the project's ongoing review. For the full year 2012 we continue to expect to allocate EUR 210-220 million on capital expenditures. During 9M 2012, the Company paid out the final dividend for 2011 of EUR 19 million and 2012 interim dividend of EUR 16 million to its A shareholders and in line with the payment schedule repaid EUR 7 million of the ECA loan. Cash and cash equivalents were at EUR 444 million as at 30 September 2012 including EUR 100 million of proceeds from the RCF loan. As at 30 September 2012, the Company's Net debt stood at EUR 481 million. NWR has no significant debt maturities until 2015. We continue to monitor the markets closely so that we are able to take advantage of opportunities either to raise new financing or to refinance outstanding debt or portions thereof as they arise. Coal segment 9M 2012 9M 2011 Chg Ex-FX P&L (EUR m) Revenues 916 1,143 (20%) (18%) EBITDA 228 382 (40%) (41%) Operating profit 103 255 (59%) (62%) Costs (EUR/t) Mining unit costs^^ 79 81 (2%) 1% Production & Sales (kt) Coal production 8,608 8,641 0% Sales to coke segment 395 417 (5%) External sales 7,208 8,013 (10%) Coking coal 3,835 3,541 8% Thermal coal 3,373 4,472 (25%) Period end inventory 1,314 457 188% Average realised prices^^ (EUR/t) Coking coal 131 181 (28%) (26%) Thermal coal 73 66 11% 12% Total coal production in 9M 2012 was flat year-on-year, and external coal sales volumes were 10% lower due to lower sales volumes of thermal coal. External coking coal sales volumes increased 8% year-on-year. Total revenues for the coal segment decreased by 20%, mainly due to lower coking coal prices and lower thermal coal volumes. External coking coal sales in 9M 2012 comprised approximately 47% mid-volatility hard coking coal, 46% semi-soft coking coal, and 7% PCI coking coal. Thermal coal sales mix in the period was approximately 80% thermal coal and 20% middlings. Mining unit costs remained flat in CZK terms in the first nine months of 2012 compared to 9M 2011 in line with the Company's guidance. All main cost categories remained well under control. The coal segment generated EBITDA of EUR 228 million, a decrease of 40% compared to 9M 2011 due to lower revenues. Coal segment outlook As previously announced, the average agreed price of coking coal for delivery in the fourth calendar quarter of 2012 is EUR 102 per tonne, a 20% decrease compared to the third quarter realised price. This average price is based on the expectation that coking coal sales in Q4 2012 will be split approximately 47% mid-volatility hard coking coal, 45% semi-soft coking coal and 8% PCI coking coal. The average price agreed for thermal coal sales for the 2012 calendar year is EUR 74 per tonne, an 11% increase compared to the 2011 average realised price. This average price is based on an expected FY 2012 mix of 80% thermal coal and 20% middlings. NWR expects production of between 11.0Mt and 11.1Mt of coal and external sales of between 10.2Mt and 10.3Mt of coal in FY 2012. The external coal sales split is expected to be approximately 50% coking coal and 50% thermal coal in FY 2012. NWR expects year-end coal inventories of 600-700kt. NWR continues to expect its mining unit costs to remain broadly flat in FY 2012 in CZK terms. Coke segment 9M 2012 9M 2011 Chg Ex-FX P&L (EUR m) Revenues 154 185 (17%) (16%) EBITDA 7 8 (16%) (49%) Operating profit 2 1 64% (208%) Costs Conversion unit costs^^ (EUR/t) 64 62 3% 7% Coal purchase charges^^ (EUR m) 97 144 (33%) Production & Sales (kt) Coke production 525 584 (10%) Coke sales 432 430 0% Period end inventory 193 126 53% Average realised prices^^ (EUR/t) Coke 299 370 (19%) (19%) Revenues for the coke segment decreased by 17% due to lower coke prices in 9M 2012. Coke sales in 9M 2012 were approximately 66% foundry coke, 17% blast furnace coke, and 17% other types. Coke conversion unit costs increased by 7% on a constant currency basis as a result of 10% lower production. Together with the lower cost of inputted coal, both internal and external, the impact of lower revenues on the operating result was muted and the segment's 9M 2012 EBITDA remained at a similar level to 9M 2011. Coke segment outlook As previously announced, the average price of coke agreed for delivery in the fourth calendar quarter of 2012 is EUR264 per tonne, an 8% decrease compared to the third quarter realised price. This average price is based on the expectation of Q4 2012 sales of approximately 73% foundry coke, 9% blast furnace coke and 18% other types. NWR continues to expect to produce 700kt and sell 600kt of coke in FY 2012. Coke unit conversion costs on a constant currency basis are expected to increase in line with the expected decrease in production in FY 2012. 9M 2012 earnings call NWR's management will host an analyst and investor conference call on 14 November 2012 at 10:00 GMT (11:00 CET) to discuss the financial results for the period. The presentation will be also made available via a live video webcast on www.newworldresources.eu and the webcast will be then archived on the Company's website. Dial in details: UK & the rest of Europe +44 (0) 20 7136 2054 US +1 212 444 0896 Czech Republic (Toll free) 800 701 231 Poland (Toll free) 00 800 121 4330 The Netherlands +31 (0) 20 713 2789 Access Code 8843127 A replay of the conference call will be available for one week by dialling: +44 (0) 20 7111 1244 (Access code: 8843127) For further information: Investor Relations Corporate Communications Tel: +31 20 570 2244 Tel: +31 20 570 2229 Email: email@example.com Email: firstname.lastname@example.org Website: www.newworldresources.eu About NWR: New World Resources Plc is one of Central Europe's leading hard coal and coke producers. NWR produces quality coking and thermal coal for the steel and energy sectors in Central Europe through its subsidiary OKD, the largest hard coal mining company in the Czech Republic. NWR's coke subsidiary OKK, is Europe's largest producer of foundry coke. NWR currently has several development projects in Poland and the Czech Republic, which form part of NWR's regional growth strategy. NWR is a FTSE 250 company, with listings in London, Prague and Warsaw. Disclaimer and cautionary note on forward looking statements and notes on certain other matters Certain statements in this document are not historical facts and are or are deemed to be "forward-looking". The Company's prospects, plans, financial position and business strategy, and statements pertaining to the capital resources, future expenditure for development projects and results of operations, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology including, but not limited to; "may", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "will", "could", "may", "might", "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These forward-looking statements involve a number of risks, uncertainties and other facts that may cause actual results to be materially different from those expressed or implied in these forward-looking statements because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond NWR's ability to control or predict. Forward-looking statements are not guarantees of future performances. Factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected include, but are not limited to, the following: risks relating to changes in political, economic and social conditions in the Czech Republic, Poland and the CEE region; future prices and demand for the Company's products, and demand for the Company's customers' products; coal mine reserves; remaining life of the Company's mines; coal production; trends in the coal industry and domestic and international coal market conditions; risks in coal mining operations; future expansion plans and capital expenditures; the Company's relationship with, and conditions affecting, the Company's customers; competition; railroad and other transportation performance and costs; availability of specialist and qualified workers; and weather conditions or catastrophic damage; risks relating to Czech or Polish law, regulations and taxation, including laws, regulations, decrees and decisions governing the coal mining industry, the environment and currency and exchange controls relating to Czech and Polish entities and their official interpretation by governmental and other regulatory bodies and by the courts; and risks relating to global economic conditions and the global economic environment. Additional risk factors are as described in the Company's annual report. Forward-looking statements are made only as of the date of this document. The Company expressly disclaims any obligation or undertaking to release, publicly or otherwise, any updates or revisions to any forward-looking statement contained in this document to reflect any change in its expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based unless so required by applicable law. Condensed consolidated interim financial information for the nine-month period ended 30 September 2012 New World Resources Plc Consolidated income statement Nine-month period ended Three-month period ended 30 September 30 September EUR thousand 2012 2011 2012 2011 Revenues 1,012,755 1,240,894 318,715 400,904 Change in inventories of finished goods and 71,200 42,221 26,028 22,550 work-in-progress Consumption of material and (284,231) (307,976) (93,986) (104,402) energy Service expenses (274,967) (291,448) (89,393) (94,414) Personnel expenses (277,292) (291,262) (89,783) (98,497) Depreciation and (129,972) (132,273) (43,724) (43,747) amortisation Net gain from material sold 6,483 5,397 1,458 1,946 Gain from sale of property, 59 (1,330) 8 (1,371) plant and equipment Other operating income 2,933 1,679 575 573 Other operating expenses (30,075) (30,516) (4,490) (9,231) Operating income 96,893 235,386 25,408 74,311 Financial income 33,403 17,191 15,370 2,511 Financial expense (62,794) (86,978) (21,652) (31,709) Profit before tax 67,502 165,599 19,126 45,113 Income tax expense (20,134) (44,576) (6,281) (11,058) Profit for the period 47,368 121,023 12,845 34,055 Attributable to: Non-controlling interests 109 1,125 29 132 SHAREHOLDERS OF THE COMPANY 47,259 119,898 12,816 33,923 EARNINGS PER SHARE (EUR) A share Basic earnings 0.17 0.45 0.05 0.12 Diluted earnings 0.17 0.44 0.05 0.12 B share Basic earnings 267.60 256.50 69.40 109.70 Diluted earnings 267.60 256.50 69.40 109.70 All activities were with respect to continuing operations. The notes on pages 16 to 34 are an integral part of this condensed consolidated financial information. New World Resources Plc Consolidated statement of comprehensive income Nine-month period ended Three-month period ended 30 September 30 September EUR thousand 2012 2011 2012 2011 Profit for the period 47,368 121,023 12,845 34,055 Other comprehensive income Foreign currency translation 25,974 19,231 19,025 (20,821) differences Derivatives - change in fair 1,364 (9,683) 2,726 (10,713) value Derivatives - transferred to 7,673 (5,998) 461 (3,174) profit and loss Income tax relating to components of other 107 1,320 (839) 460 comprehensive income Total other comprehensive income for the period, net 35,118 4,870 21,373 (34,248) of tax Total comprehensive income 82,486 125,893 34,218 (193) for the period Attributable to: Non-controlling interests 186 849 75 51 SHAREHOLDERS OF THE COMPANY 82,300 125,044 34,143 (244) The notes on pages 16 to 34 are an integral part of this condensed consolidated financial information. New World Resources Plc Consolidated statement of financial position 30 September 31 December 30 September EUR thousand 2012 2011 2011 ASSETS Property, plant and equipment 1,413,865 1,354,356 1,297,702 Mining licences 145,135 148,196 156,500 Accounts receivable 9,567 10,217 9,735 Deferred tax 10,158 9,630 10,700 Restricted deposits 16,722 12,506 15,702 Derivatives 35 15 20 TOTAL NON-CURRENT ASSETS 1,595,482 1,534,920 1,490,359 Inventories 166,510 93,089 113,965 Accounts receivable and prepayments 166,884 202,501 232,921 Derivatives 349 - 283 Income tax receivable 5 169 112 Cash and cash equivalents 443,566 536,910 445,316 Restricted cash - 6,465 6,465 TOTAL CURRENT ASSETS 777,314 839,134 799,062 TOTAL ASSETS 2,372,796 2,374,054 2,289,421 EQUITY Share capital 105,863 105,756 105,756 Share premium 2,368 2,368 6,880 Foreign exchange translation reserve 77,114 56,056 96,270 Restricted reserve 132,454 129,136 134,525 Equity-settled share based payments 13,151 14,235 17,017 Hedging reserve 8,497 (2,168) 9,174 Merger reserve (1,631,161) (1,631,161) (1,631,161) Other distributable reserve 1,684,463 1,692,319 1,692,319 Retained earnings 410,268 384,386 366,710 EQUITY ATRIBUTABLE TO THE SHAREHOLDERS 803,017 750,927 797,490 OF THE COMPANY Non-controlling interests 1,748 1,632 1,735 TOTAL EQUITY 804,765 752,559 799,225 New World Resources Plc Consolidated statement of financial position (continued) 30 September 31 December 30 September EUR thousand 2012 2011 2011 LIABILITIES Provisions 175,154 166,756 110,011 Long-term loans 69,357 76,184 83,193 Bonds issued 740,999 738,646 745,702 Employee benefits 90,553 87,912 96,374 Deferred revenue 2,041 2,128 2,263 Deferred tax 115,615 116,715 119,988 Other long-term liabilities 964 466 452 Cash-settled share-based payments 1,315 880 707 Derivatives 11,771 25,332 26,393 TOTAL NON-CURRENT LIABILITIES 1,207,769 1,215,019 1,185,083 Provisions 4,506 9,139 5,015 Accounts payable and accruals 200,605 219,234 216,491 Accrued interest payable on bonds 23,530 8,937 23,806 Derivatives 7,367 28,069 13,501 Income tax payable 10,195 26,881 29,241 Current portion of long-term loans 13,851 13,852 16,724 Short-term loans 100,000 99,695 - Cash-settled share-based payments 208 669 335 TOTAL CURRENT LIABILITIES 360,262 406,476 305,113 TOTAL LIABILITIES 1,568,031 1,621,495 1,490,196 TOTAL EQUITY AND LIABILITIES 2,372,796 2,374,054 2,289,421 The notes on pages 16 to 34 are an integral part of this condensed consolidated financial information. New World Resources Plc Consolidated statement of cash flows Nine-month period ended Three-month period ended 30 September 30 September EUR thousand 2012 2011 2012 2011 Cash flows from operating activities Profit before tax and 67,502 165,599 19,126 45,113 non-controlling interest Adjustments for: Depreciation and 129,972 132,273 43,724 43,747 amortisation Changes in provisions (3,721) 576 (10,669) 4,161 (Profit) / loss on disposal of property, plant and (59) 1,330 (8) 1,371 equipment Interest expense, net 50,762 41,585 16,615 14,183 Change in fair value of (25,635) 2,595 (7,731) 9,918 derivatives Equity-settled share-based 4,161 4,520 1,088 1,782 payment transactions Operating cash flows before 222,982 348,478 62,145 120,275 working capital changes (Increase) / Decrease in (73,422) (57,951) (27,531) (29,851) inventories (Increase) / Decrease in 36,360 (1,792) 8,137 15,715 receivables (Decrease) / Increase in payables and deferred 3,752 12,810 13,549 (5,699) revenue (Increase) / decrease in restricted cash and 2,668 (10,871) 6,134 2,808 restricted deposits Currency translation and (12,429) 1,806 (11,051) (1,793) other non-cash movements Cash generated from 179,911 292,480 51,383 101,455 operating activities Interest paid (32,120) (36,287) (474) (1,822) Corporate income tax paid (41,560) (45,868) (4,525) (10,195) Net cash flows from 106,231 210,325 46,384 89,438 operating activities Cash flows from investing activities Interest received 2,990 8,852 988 3,348 Purchase of land, property, (165,427) (155,739) (42,741) (50,978) plant and equipment Proceeds from sale of property, plant and 566 863 6 826 equipment Net cash flows from (161,871) (146,024) (41,747) (46,804) investing activities Cash flows from financing activities Repayments of other long (7,123) (7,123) - - term loans Repayments of short-term (100,054) - - - borrowings Proceeds from short-term 100,000 - - - borrowings Proceeds from exercise of 3 3 3 3 share options Dividends paid to A (34,369) (100,429) (15,862) (42,195) shareholders Dividends paid to B - (40,000) - - shareholders Dividends paid to (75) (157) (34) (157) non-controlling interest Net cash flows from (41,618) (147,706) (15,893) (42,349) financing activities Net effect of currency 3,914 (520) 2,973 2,473 translation Net increase/(decrease) in (93,344) (83,925) (8,283) 2,758 cash and cash equivalents Cash and Cash Equivalents at 536,910 529,241 451,849 442,558 the beginning of period Cash and Cash Equivalents at 443,566 445,316 443,566 445,316 the end of period The notes on pages 16 to 34 are an integral part of this condensed consolidated financial information. New World Resources Plc Consolidated statement of changes in equity Share Share Foreign Restricted Equity-settled Hedging Merger Other Retained Shareholders’ Non-controlling Consolidated EUR thousand capital premium exchange reserve share based reserve reserve distributable earnings equity interests group total translation payment reserve reserve Balance at 1 105,756 2,368 56,056 129,136 14,235 (2,168) (1,631,161) 1,692,319 384,386 750,927 1,632 752,559 January 2012 Profit for the - - - - - - - - 47,259 47,259 109 47,368 period Total other comprehensive - - 21,058 3,318 - 10,665 - - - 35,041 77 35,118 income Total comprehensive - - 21,058 3,318 - 10,665 - - 47,259 82,300 186 82,486 income for the period Transaction with owners recorded directly in equity Share options 107 - - - (5,245) - - - 5,141 3 - 3 exercised Share options - - - - 4,161 - - - (5) 4,156 5 4,161 for A Shares Dividends paid - - - - - - - (7,856) (26,513) (34,369) - (34,369) A Shares Dividends paid to - - - - - - - - - - (75) (75) non-controlling interest Total transactions 107 - - - (1,084) - - (7,856) (21,377) (30,210) (70) (30,280) with owners Balance at 30 105,863 2,368 77,114 132,454 13,151 8,497 (1,631,161) 1,684,463 410,268 803,017 1,748 804,765 September 2012 Balance at 1 105,883 66,326 79,343 133,169 17,157 23,322 - - 384,195 809,395 - 809,395 January 2011 Profit for the - - - - - - - - 119,898 119,898 1,125 121,023 period Total other comprehensive - - 17,533 1,671 - (14,058) - - - 5,146 (276) 4,870 income Total comprehensive - - 17,533 1,671 - (14,058) - - 119,898 125,044 849 125,893 income for the period Transaction with owners recorded directly in equity Share options 105 4,512 - - (4,614) - - - - 3 - 3 exercised Share options - - - - 4,508 - - - - 4,508 12 4,520 for A Shares Dividends paid A - - - - - - - (2,498) (97,931) (100,429) - (100,429) Shares Dividends paidB - - - - - - - - (40,000) (40,000) - (40,000) Shares Dividends paid to - - - - - - - - - - (157) (157) non-controlling interest Reclassification in respect of 1,691,650 (66,326) (3,689) (4,120) (569) (722) (1,630,472) - (9,140) (23,388) 23,388 - reorganisation Reduction in (1,694,817) - - - - - - 1,694,817 - - - - share capital Acquisition of non-controlling interests 2,935 2,368 3,083 3,805 535 632 (689) - 9,688 22,357 (22,357) - settled by ordinary shares issued Total transactions (127) (59,446) (606) (315) (140) (90) (1,631,161) 1,692,319 (137,383) (136,949) 886 (136,063) with owners Balance at 30 105,756 6,880 96,270 134,525 17,017 9,174 (1,631,161) 1,692,319 366,710 797,490 1,735 799,225 September 2011 New World Resources Plc Operating and Financial Review for the nine-month period ended 30 September ('9M') 2012 Corporate Information New World Resources Plc ('NWR Plc' or the 'Company') is a public limited liability company with its registered office at One Silk Street, London EC2Y 8HQ, United Kingdom. The Company is the sole producer of hard coal in the Czech Republic and one of the leading hard coal and coke producers in Central Europe. NWR Plc produces coking and thermal coal through its subsidiary OKD, a.s. ('OKD') and coke through its subsidiary OKK Koksovny, a.s. ('OKK'). NWR Plc and its subsidiaries are collectively referred to as 'the Group'. The Group operates four mines and four coking batteries in the Czech Republic and has several development projects in Poland and the Czech Republic. The Group serves several large Central and Eastern European steel and energy producers, mainly in the Czech Republic, Poland, Austria, Slovakia, Hungary and Germany. Among its key customers are Arcelor Mittal Steel, U.S. Steel, Dalkia, Moravia Steel, voestalpine, Verbund and ČEZ. The Group's largest source of revenue is the sale of coking coal, which accounted for 50% of total revenues in 9M 2012, followed by the sale of thermal coal (24%) and the sale of coke (13%). The majority of our coal sales are based on long-term framework agreements. Thermal coal sales are priced on a calendar year basis. All of the Group's coking coal and coke sales are priced quarterly. Financial Results Overview Revenues. The Group's revenues decreased by 18% (17% on a constant currency basis), from EUR 1,240,894 thousand in 9M 2011 to EUR1,012,755thousand in 9M2012. This is mainly attributable to decreased revenues from coking coal and coke, driven by lower prices as well as to decreased revenues from thermal coal, driven by lower sales volumes offset in part by higher prices. Operating expenses. Total operating expenses including depreciation and amortisation, net of other operating income and gain/loss from sale of material and property, plant and equipment, decreased from EUR 1,047,729thousand to EUR987,062thousand or by 6% (3% on a constant currency basis) in 9M 2012 compared to the same period in 2011. This is mainly attributable to the decrease in: · prices and volumes of externally purchased coking coal resulting in lower costs of external coking coal used for coke production; · number of employees, holiday allowance and bonus accrual resulting in lower personnel expenses; as well as · advisory expenses as a result of one-off costs incurred in relation to the reincorporation process in 2011. EBITDA. EBITDA decreased by EUR 142,183 thousand or by 39% (40% on a constant currency basis) from EUR 368,989 thousand in 9M 2011 to EUR 226,806 thousand in 9M 2012. The decrease in revenues of EUR228,139 thousand was only partly offset by a decrease in total operating expenses, before depreciation and amortisation, gain from sale of PPE and net of changes in inventories, of EUR 85,956 thousand. Basis of Presentation General information The condensed consolidated interim financial information (the 'financial information') presented in this document is prepared for the nine-month period ended 30September 2012, with the nine-month period ended 30 September 2011 as the comparative period. The Company was incorporated in the UK on 30 March 2011 as part of a corporate reorganisation process under which, on 6 May 2011, it became the holding company for the business held by New World Resources N.V. ('NWR NV'). In accordance with the requirements of International Financial Reporting Standards as adopted by the European Union ('adopted IFRS'), the Company's consolidated financial results and financial position prior to 6 May 2011 are those of NWR NV. The financial information includes NWR Plc and its subsidiaries. The Company's significant subsidiaries as at 30 September 2012 are: Entity % Equity Nature of Activity New World Resources Plc New World Resources N.V. 99.8 % Management services OKD, a.s. 100.0 %* Coal mining OKD, HBZS, a.s. 100.0 %* Emergency services, waste processing OKK Koksovny, a.s. 100.0 %* Coke production NWR KARBONIA S.A. 100.0 %* Development coal mining projects (Poland) NWR Communications, s.r.o. 100.0 %* Public relations and communication * representing 100% ownership by NWR NV The objective of the Company is to act as a holding entity for the Group. See note 'Changes in the consolidated group' on page 18 of this report for information on the comparative period. All of the Company's consolidated subsidiaries are incorporated in the Czech Republic, with the exception of NWR KARBONIA S.A. ('NWR Karbonia'), which is incorporated in Poland, and NWR NV, which is incorporated in the Netherlands. Statement of compliance The presented financial information is prepared based on the recognition and measurement criteria of adopted IFRS and on the going concern basis that the Directors consider appropriate. These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Company as at and for the year ended 31 December 2011. Accounting policies The financial information has been prepared on the basis of accounting policies and methods of compilation consistent with those applied in the annual consolidated financial statements for the year ended 31 December 2011, which are contained within the 2011 Annual Report and Accounts of the Company, available on the Group's website at www.newworldresources.eu. There is one new standard (Amendment to IFRS 7 Financial Instruments: Disclosure) relevant for the Group which is effective from 1 January 2012. This amendment affects disclosure and presentation only and as such is not relevant for interim financial statements and has no impact on the Group's financial position or performance. Basis of preparation The financial information is prepared on a historical cost basis, except for derivative and ce The story has been truncated, [TRUNCATED]
New Wld Res Plc NWR NWR Nine Months 2012 Results
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