KGHM Jumps as Stronger Copper Sales Boost Second-Quarter Profit

KGHM Polska Miedz SA posted a higher-than-estimated profit in the second quarter on the back of stronger copper sales, sending its share up by as much as 3.9 percent.

Poland’s sole copper producer earned a net 796 million zloty ($212 million) in April-June, beating a 550 million zloty mean estimate in a Bloomberg survey of six analysts. Its shares jumped 2.4 percent to 93.60 zloty at 9:26 a.m. in Warsaw, curbing its drop since June 30 to 12 percent amid lower metals prices. The WIG20 Index declined 3.9 percent in the period.

With copper plummeting to the lowest since 2009 this week amid uncertainty over demand from China, KGHM is analyzing “possible risks” which may require a review of the company’s investment plans and writedowns, it said in a statement. In the second quarter it was able to mitigate the effect of lower prices by selling 145,500 tons of copper, compared with 134,600 tons estimate by Societe Generale SA.

“We may review our estimates in light of the group selling more copper in the second quarter at probably the highest average price this year,” Bartlomiej Kubicki, an analyst at Societe Generale SA in Warsaw, said in a note. KGHM’s sales increase may have come at the cost of reducing stockpiles, which “implies relatively lower” sales in the second half of 2015, he said.

Kubicki has a hold rating on the stock with a 12-month share-price estimate of 99 zloty.