KGHM Polska Miedz (KGH) Q3 2024 earnings summary

Executive summary

• Group revenues for the first nine months of 2024 reached PLN 26,139 million, up 2% year-over-year, driven by higher metals prices and increased sales, with net profit rising to PLN 1,314 million.

• Adjusted EBITDA increased 44% year-over-year to PLN 6,186 million, mainly due to improved performance at KGHM INTERNATIONAL LTD.

• Payable copper production for the Group rose 3% year-over-year, with strong output from KGHM INTERNATIONAL LTD. offsetting lower production at Sierra Gorda.

• The Group maintained a stable financial position, with net debt/adjusted EBITDA at 0.9 as of September 30, 2024.

• Strategic investments continued in mining, energy transition, and digital transformation.

Financial highlights

• Group revenues totaled PLN 26,139 million, up 2% year-over-year, with adjusted EBITDA rising by PLN 1,878 million (+44%) to PLN 6,186 million.

• Net profit for the period was PLN 1,314 million, up from PLN 836 million in the prior year.

• KGHM Polska Miedź S.A. reported revenues of PLN 22,261 million and adjusted EBITDA of PLN 3,402 million (+8% year-over-year).

• Operating cash flow was PLN 3,433 million, with net cash used in investing activities of PLN 4,048 million.

• Adjusted EBITDA margin improved to 22% from 15% year-over-year.

Outlook and guidance

• The Group targets climate neutrality by 2050, with a 30% reduction in Scope 1 and 2 emissions by 2030 versus 2020.

• Plans to increase the share of renewable energy sources to 50% of power needs by 2030, supporting decarbonization and energy security.

• CapEx target for 2024 is PLN 3.9 billion, with PLN 2.5 billion executed in the first nine months.

• Ongoing review and update of the Group's strategy is expected to conclude by year-end 2024.

• No major deviations in payable metals production expected for 2024, with preparations underway for the Liberty deposit in 2025.