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New Wld Res Plc NWR NWR Nine Months 2012 Results


Attachment:

  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[1] 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 EUR 0.17.

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 EUR 106 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^^[2]            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^^[3] (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^^[4] (EUR/t)       64      62    3%     7%
Coal purchase charges^^[5]  (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^^[6]  (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 EUR 264 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: ir@nwrgroup.eu                                             Email:
pr@nwrgroup.eu

 

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 paid B           -        -       -       -       -        -           -         -  (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 EUR 1,012,755 thousand  in 
9M 2012. 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 
1,047,729 thousand to EUR 987,062 thousand 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 EUR 228,139 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 30 September 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

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