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TAURON mining business earnings increase

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World Coal,

TAURON, an energy holding company in Poland, has reported coal extraction and higher sales volumes have helped the company’s mining business to increase earnings. It generated EBITDA of PLN 134.7 million in 3Q15 compared to PLN 55.3 million the previous year.

During the first nine months of 2015, TAURON produced approximately 3.5 million t of coal. The lower output in 1H15 was due to challenging mining and geological conditions at the group's coal mines and the sale of the coal inventory.

The group’s coal sales have reached 3.66 million t since the beginning of this year compared to 3.53 million t a year ago. The higher sales of the medium size lump coals and the coal dust (pulverized coal) are reported to be the key reason for this increase in sales volumes.

The Janina and Sobieski coal mines supplied 43% of TAURON's coal demand.

“Facing the demanding market environment and with hard coal prices hitting record low levels we are taking steps aimed at both, maximizing hard coal extraction and sales volumes, as well as introducing more flexible approach to the cost side of our mining business. I would like to emphasize that in Q3 the company achieved a very high coal extraction volume, i.e. more than 1.4 million t. Furthermore, we concluded an agreement with the representatives of the workforce that made granting of hard coal allowances for former employees dependent on the company's financial standing. This allowed us to dissolve the actuarial provision and achieve improved earnings,“ stated Jerzy Kurella, CEO of TAURON Polska Energia.

The mining segment's revenue reached PLN 332.8 million in 3Q15 whereas it came in at PLN 341.4 million last year. The lower revenue is reported to be a result of the declining coal market prices. Nevertheless, the mining segment's operating profit reached PLN 106.7 million whereas it was PLN 29.1 million a year ago.

Additionally, in 3Q15, the construction works were continued on the Grzegorz shaft at the Sobieski coal mine and on the 800 m level at the Janina coal mine, which is already 34% complete.

Edited from press release by Harleigh Hobbs

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