May 14 (Bloomberg) -- New World Resources Plc, the Czech Republic’s largest producer of coal for steelmakers, said its first-quarter loss narrowed as the company compensated for falling commodity prices by cutting operational costs.
The loss for the three months through March reached 27 million euros ($37 million), compared with an 81 million-euro loss in the same period a year earlier, the Amsterdam-registered company said today in a regulatory statement. That was wider than the average 23.4 million-euro loss estimated by five analysts in a Bloomberg survey.
NWR continues to negotiate with bondholders and seeks to finalize its capital structure review by the end of this year to shore up its balance sheet because it can no longer withstand the deterioration of the coal market. The price of its coking coal dropped 12 percent in the past year. The company reiterated its full-year production target of between 9 megatons and 9.5 megatons of coal.
“This pricing environment is clearly a challenge for us and it is critical that NWR does everything within its control to optimize its operations,” Chairman Gareth Penny said in the statement.
The shares rose 1.6 percent to 12.8 koruna at 9:37 a.m. in Prague. The stock has lost 46 percent of its value this year.
NWR managed to bring down its mining costs 23 percent during the three-month period to 66 euros per ton, the company said in the statement. Net debt in the first quarter rose to 651 million euros from 643 million euros a year earlier.
“The fact that the company kept mining costs stable despite lower production is slightly positive,” Erste Group Bank AG Prague analyst Petr Bartek said in a note published after the results. “The ongoing discussion with bondholders remains the most important topic.”
There is a potential for a “small uptick” in the coking coal price in the short term, Chief Financial Officer Marek Jelinek said during a telephone interview today. Prices of thermal coal remain depressed because of excessive global inventory, he said.
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