Jastrzebska Spólka Weglowa (JSW) Q3 2024 earnings summary

Executive summary

• Q3 2024 coal production rose 6.4% quarter-on-quarter to 3.05 million tons, with active longwalls up 16.6% and mining cash cost per ton down 13.3%.

• Q3 sales revenue declined 2.6% sequentially to PLN 2.69 billion, with EBITDA at PLN 57.7 million and a net loss of PLN 308.9 million, improved from Q2's PLN 6,052.2 million loss.

• The Group reported a net loss of PLN 6,370.8 million for the nine months ended 30 September 2024, mainly due to PLN 6,882.0 million in impairment losses.

• A strategic transformation plan was launched, targeting PLN 8.5 billion in total impact by 2027, focusing on efficiency, cost reduction, and revenue diversification.

• The Group remains the largest producer of hard coking coal and a key coke supplier in the EU, with the State Treasury as the majority shareholder.

Financial highlights

• Q3 sales revenue: PLN 2.69 billion, down 2.6% from Q2; nine-month revenue: PLN 8.87 billion, down 26% year-over-year.

• Q3 EBITDA: PLN 57.7 million; net loss: PLN 308.9 million; nine-month net loss: PLN 6.37 billion, mainly due to asset impairments.

• Mining cash cost per ton in Q3: PLN 782.83, down 13.3% quarter-on-quarter; cash conversion cost for coke: PLN 312 per ton.

• Net working capital at quarter-end: PLN 5.3 billion; cash position: PLN 769.2 million, down from PLN 2.69 billion at year-end 2023.

• Total assets decreased to PLN 23.48 billion from PLN 27.79 billion at year-end 2023.

Outlook and guidance

• Transformation plan targets PLN 8.5 billion in savings and efficiency gains by 2027, with the largest impact expected in 2026–2027.

• Production mix to shift toward coking coal, aiming for a 14.5 million ton run rate in 2026, with coking coal share rising above 79%.

• CapEx will be optimized and aligned with production and transformation goals, with a one-off reduction of PLN 1.5 billion in 2025.

• Coal production target for 2024 updated to 12.35 million tons due to operational incidents and revised assumptions.

• Management sees no material uncertainty regarding going concern for the next 12 months, supported by liquidity from the FIZ asset portfolio.