On Wednesday 24 August, NWR announced its results for the first half year of 2011. The Company delivered impressive growth with revenues up 17% and EBITDA up 48% year on year. Results were supported by the strong international pricing environment and robust demand from the Central European steel industry. Importantly, NWR’s early investments in POP 2010 and COP 2010 bolstered efficiency and productivity drives at the half year. Strong results led to the declaration of an interim dividend of EUR 0.16 per share, wholly in line with NWR’s dividend policy.
Benefitting from the decision to price coking coal sales on a quarterly basis, NWR’s contracted prices continue to be in line with international prices for both hard and semi-soft coking coal. In mining, NWR remains on course to achieve overall production and sales targets for 2011. Similarly for coke NWR remains on track to deliver on its production and sales targets, confirming its leading position in the European foundry coke market.
Safety
Safety record improved further and we have been mining in the first half of the year with less than eight reportable injuries per million hours worked, the best result ever. This is largely attributable to the major investments in new equipment and safety training - and importantly, with a great deal of dedication and skill from NWR’s employees.
Despite this improvement, tragically four of NWR’s miners lost their lives at work this year. Chairman Mike Salamon emphasised the Company’s continued commitment to ever more stringent safety practices: “Following the two fatalities we had in July we have put even greater emphasis on managing the risks associated with tectonic stress releases in our operations, taking further precautions through the application of even more rigorous safety criteria to minimise the human impact of these incidents.” The management have taken additional measures for the bounce prone areas by extending the protected zone, purchasing more equipment to better identify increasing stress areas, providing special personal protective gear for the workers mining in these areas, as well as working together with other experts from around the world to analyse bounce prevention actions that can be taken.
Debiensko
Debiensko, the largest and most important growth project in NWR’s pipeline, was given its final approval by the Board of Directors in June. This project will open a deposit of 190 million tonnes of predominantly hard coking coal.
NWR expects to break ground later this year and start production from the new mine in 2017. The average annual output of 2 million tonnes will be a sizeable add-on to the current production capacity.
Management has allocated EUR 411 million of development capital expenditure, of which NWR expects to invest around EUR 20 million already this year.
Dividend
NWR’s Board of Directors proposed an interim dividend of EUR 0.16 per A share, which will be paid to shareholders on 30 September 2011. Both NWR NV and NWR Plc shareholders are eligible to receive this dividend.
The dividend is declared in Euros and shareholders may elect to receive this dividend in Pounds Sterling.
Further details can be found on the Company’s website or by contacting the IR department on ir@nwrgroup.eu.
Reincorporation in the United Kingdom
NWR has completed its reincorporation in the United Kingdom and is now part of the FTSE 250 and FTSE 350 Mining indices. Commenting on the process, Mike Salamon said: “We continue to believe this will be a positive, long-term step for our shareholders, improving the liquidity and risk profile of our stock.”
In connection with the reincorporation process, NWR Plc initiated a compulsory squeeze-out procedure in July to acquire all remaining outstanding shares in NWR NV, which represents approximately 0.4% of NWR NV shares. The process is in accordance with Dutch law and in connection with the squeeze-out process, NWR Plc published a public Writ of Summons.
Outlook
Given the recent market upheaval and the uncertain European macroeconomic environment, management is cautious on the short-term outlook of the business. Although, NWR has received no physical evidence of a slowdown in its regional market to date, management believes that there is a risk of near term volatility in prices and 2012 volumes. And as a result, NWR continues to monitor the markets closely, whilst remaining optimistic about the long-term outlook.
Radek Němeček,
rnemecek@nwrgroup.eu