KGHM Polska Miedz (KGH) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue was PLN 17.48 billion, down 2% year-over-year, while net profit rose to PLN 1.074 billion from PLN 401 million, driven by higher copper prices and improved operational performance.

• Adjusted EBITDA increased 35% to PLN 4.208 billion, with the margin rising to 22% from 16% year-over-year, supported by strong results at KGHM INTERNATIONAL LTD.

• International operations rebounded, especially at Robinson, while Sierra Gorda faced challenges from lower ore quality.

• The Group maintained a stable financial position, with a net debt/adjusted EBITDA ratio of 0.7 and a 22.5% share price increase in H1 2024.

• The Group advanced production, sales, and investment plans, including energy transition initiatives.

Financial highlights

• Group revenue was PLN 17.48 billion, down 2% year-over-year; KGHM S.A. revenue was PLN 15.08 billion.

• Adjusted EBITDA rose 35% to PLN 4.208 billion; KGHM S.A. EBITDA increased 10% to PLN 2.472 billion.

• Net profit for the Group reached PLN 1.074 billion, up from PLN 401 million in H1 2023.

• CapEx for H1 2024 was PLN 1.75 billion, up 50% year-over-year, with a full-year target of PLN 3.95 billion.

• Cash and cash equivalents at period end were PLN 2.44 billion, with net debt at PLN 3.59 billion.

Outlook and guidance

• CapEx is expected to rise in coming years to support long-term growth, with a focus on strategic projects and efficiency improvements.

• The Group targets 2024 CapEx of PLN 3.95 billion, with 28% executed in H1 2024.

• Strategic goals for 2030 include increasing domestic electrolytic copper production to 600 kt and maintaining a top-three global silver producer position.

• Decarbonization efforts continue, aiming for climate neutrality by 2050 and a 30% reduction in Scope 1 and 2 emissions by 2030.

• The Group expects stable operations, with no identified risks to going concern or production plans.