(Corrects estimate in second paragraph.)
The total loss for the three months through September reached 122.3 million euros ($165 million) compared with a 34.2 million-euro profit for the same period a year earlier, the Amsterdam-registered company said today in an e-mailed statement. Analysts surveyed by Bloomberg expected a 59.3 million-euro loss, according to the average of eight estimates.
NWR is battling a drop in coal prices amid shrinking demand from steelmakers as well as an oversupply of thermal coal for electricity. The company had a net loss of 132.2 million euros after taking a charge of 83.7 million euros for the sale of its OKK coking facility in September as part of a plan to scale down operations and stem losses.
The loss “is significantly worse than expectations, but the reason is the extraordinary item,” J&T Banka analyst Bohumil Trampota said in a note after the results were published. “Without this item, the loss would be 38.6 million euros, which is above expectations.”
The shares rose as much as 7 percent, the biggest intraday gain since Sept. 30, to 27.60 koruna at 12:19 p.m. in Prague. The stock has lost 72 percent of its value this year.
The third-quarter operating loss reached 43.8 million euros and revenue for the period fell 31 percent to 200.6 million euros, the company said. NWR has pledged to shut down the unprofitable Paskov mine, renegotiate the collective wage agreement with unions by the end of the year and keep capital expenditure below 100 million euros in the coming years.
NWR negotiated waivers and amendments to its debt covenants twice this year. While it won’t be able to draw on its current line of credit until it expires on Feb. 7, it hopes to extend it for more than one year, Chief Financial Officer Marek Jelinek said during a conference call today.
The miner expects to generate positive free cashflow next year on the assumption that prices of coal won’t plunge further, Jelinek said. That target doesn’t include costs of closing down the Paskov mine, most of which won’t be incurred until after the mine is shut, he said.
The company revised its target for full-year 2013 coal production to 9 million metric tons to 9.5 million tons from 9 million to 10 million tons. Production next year is expected to reach 8 million to 9 million tons, with 60 percent of the output from coking coal, according to the statement.
NWR aims to bring down the cost of extracting 1 ton of coal from the current 81 euros per ton to 60 euros per ton at the end of next year. If achieved, the measure will bring the company back to profitability, Jelinek said.
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