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Press Releases / 2015 / 1st Quarter 2015 Results 

1st Quarter 2015 Results

13/5/2015

Amsterdam, 13 May 2015

 

Unaudited Q1 2015 Results

New World Resources Plc (‘NWR’ or the ‘Company’) today announces its unaudited financial results for the first quarter 2015. Comparative information, unless otherwise stated, is for the first quarter 2014.

Q1 2015 Financial summary

  • Revenues of EUR 135 million, down 22%.
  • Coking coal average realised price of EUR 90/t, down 1%;
  • Thermal coal average realised price of EUR 56/t, down 7%.
  • Cash mining unit costs[1] of EUR 71/t, up 7% on 20% lower production. On target for mid EUR 60’s for FY 2015.
  • Selling and administrative expenses down 25% to EUR 25 million.
  • EBITDA of EUR (2) million, representing a decrease of EUR 15 million.
  • Non-cash gain of EUR 49 million on fair value revaluation of mandatory convertible notes.
  • Basic earnings per A share of 0.37 eurocents.
  • Net debt of EUR 278 million, including cash of EUR 84 million as of 31 March 2015.

Q1 2015 Operational summary

  • Regrettably, one miner lost his life during Q1 2015.
  • Safety metrics LTIFR[2] of 6.36 vs. 8.18 in FY 2014.
  • Coal production of 1.8Mt, down 20% and coal sales of 1.6Mt, down 18%.
  • Coal sales mix of 64% coking coal and 36% thermal coal.
  • CAPEX of EUR 15 million, up 24%.
  • Coal Inventory of 875kt, up 26% year on year.
  • Total headcount including contractors down 3%.

2015 Prices and targets[3]

  • Average price for 74% of 2015 expected coking coal production agreed at EUR 93/t.
  • Average price for thermal coal production agreed at EUR 52/t.
  • Production and sales volume of 7.5 – 8.0Mt and 8.0Mt respectively.
  • 60% coking coal in the sales mix.
  • Cash mining unit costs of around EUR 65 per tonne.
  • CAPEX of EUR 30-40 million.
  • Improvement in LTIFR towards the target of below 5.

CFO’s statement

The coal market has remained challenging throughout the first quarter of this year but I am pleased to report that New World Resources performed in line with, and by some parameters ahead of, the budgetary targets that we set ourselves, and that we are on track to reach our full-year targets.

Our safety performance in the first three months of this year improved by 22% against last year, with 6.36 lost-time injuries per million hours worked. This is testament to our safety-first policy, and moves us towards our LTIFR target of below 5. Sadly, however, I must report the loss of one of our colleagues at the Karvina mine, and on behalf of everyone at NWR I extend sincere condolences to his family and friends.

NWR generated revenues of EUR 135 million in the first quarter of this year, 22% down year on year as a result of lower sales prices for our coal and lower volumes sold. We produced 1.8Mt of coal in the first quarter, and we are on track to achieve our full-year production target of 7.5 – 8.0Mt.

Cash mining costs per tonne, at EUR 71, were 7% up year-on-year on 20% lower production. We remain on track with our full-year forecast. Selling and administrative expenses were down 25% to EUR 25 million. This cost performance reflects our ongoing commitment to cost discipline.

Although the global spot prices for coking coal have continued their downward trend this year, NWR’s exposure to that price development has been limited by the fact that our coking coal prices are largely locked-in for the year at an average of EUR 93 per tonne. Concurrently, we are in early-stage talks to potential investors about refinancing our EUR 35 million SSF, and have appointed a financial advisor to assist in the process.

As these results clearly indicate, the market environment in which coal companies operate continues to be extremely difficult and our business remains under pressure. However, as we move through the year our production rate is expected to increase while we remain fully focused on safety and cost management.

Marek Jelinek

Executive Director and CFO


Selected financial and operational data [4]

(EUR m, unless stated otherwise)

Q1 2015

Q1 2014

Chg

 

Revenues

135

173

(22%)

 

Cost of sales

123

147

(16%)

 

   Excluding Change in inventories

138

167

(18%)

 

Cash mining unit costs (EUR/t)[5]

71

66

7%

 

Gross profit

12

26

(52%)

 

Selling and administrative expenses

25

34

(25%)

 

EBITDA

(2)

12

-

 

Operating loss

(13)

(8)

-

 

Profit / (Loss) for the period

26

(27)

-

 

Basic earnings / (loss) per A share (EUR)

0.00

(0.03)

-

 

Total assets

545

876

(38%)

 

Cash and cash equivalents

84

159

(47%)

 

Net debt

278

651

(57%)

 

 

 

 

 

 

Net cash flow from operations

(28)

(19)

-

 

CAPEX

15

12

24%

 

 

 

 

 

 

Total headcount incl. contractors

14,182

14,650

(3%)

 

LTIFR

6.36

7.27

(13%)

 


 

Production & Sales (kt)

Q1 2015

Q1 2014

Chg

 

Coal production

1,778

2,226

(20%)

 

Total coal sales

1,565

1,906

(18%)

 

   Coking coal[6]

999

1,243

(20%)

 

   Thermal coal[7]

566

663

(15%)

 

Period end inventory

875

694

26%

 

Average realised prices (EUR/t)

 

 

 

 

Coking coal

90

91

(1%)

 

Thermal coal

56

60

(7%)

 

 

Q1 2015 earnings call and webcast:

NWR’s management will host an analyst and investor conference call on 13 May 2015 at 10:00 BST (11:00 CET). The presentation will be made available via a live audio webcast on www.newworldresources.eu and then archived on the Company’s website.

For those who would like to join the live call, dial in details are as follows:

UK and Europe: +44(0)20 3427 1901

US: +1646 254 3365

Confirmation Code: 7781623

 

 

Investor and Media Contact:

Radek Nemecek

Tel: +420 727 982 885

rnemecek@nwrgroup.eu

 

Website:  www.newworldresources.eu

 

 

About NWR:

New World Resources Plc is a Central European hard coal producer. NWR produces quality coking and thermal coal for the steel and energy sectors in Central Europe through its subsidiary OKD, the largest hard coal mining company in the Czech Republic.


 

 

 

 

 

 

 

Operating and financial review and

Condensed consolidated interim financial statements
for the three-month period
ended 31 March 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

New World Resources Plc

Consolidated statement of comprehensive income

 

Three-month period

ended 31 March

EUR thousand

2015

2014

(restated)

 

 

 

Revenues

135,249

172,535

Cost of sales

(123,059)

(146,992)

 

 

 

Gross profit

12,190

25,543

Selling expenses

(9,890)

(15,645)

Administrative expenses

(15,461)

(18,221)

Gain / (loss) from sale of property, plant and equipment

11

(45)

Other operating income

473

962

Other operating expenses

(621)

(528)

 

 

 

Operating loss

(13,298)

(7,934)

Finance income

54,262

2,458

Finance expenses

(15,445)

(18,009)

Capital restructuring

-

(2,344)

 

 

 

Profit / (loss) before tax

25,519

(25,829)

Income tax benefit / (expense)

157

(835)

 

 

 

Profit / (loss) for the period

25,676

(26,664)

 

 

 

Other comprehensive income

 

 

Items that may be reclassified subsequently to profit or loss:

1,302

(297)

Foreign currency translation differences

1,302

(341)

Income tax relating to components of other comprehensive income

-

44

Items that will never be reclassified to profit or loss

-

-

 

 

 

Total other comprehensive income for the period, net of tax

1,302

(297)

 

 

 

Total comprehensive income for the period

26,978

(26,961)

 

 

 

Profit / (loss) attributable to:

 

 

Shareholders of the Company

25,676

(26,664)

 

 

 

Total comprehensive income attributable to:

 

 

Shareholders of the Company

26,978

(26,961)

 

 

 

EARNINGS / (LOSS) PER SHARE (EUR)

 

 

A share

 

 

Basic earnings / (loss)

0.00

(0.03)

Diluted earnings / (loss)

0.00

(0.03)

B share

 

 

Basic earnings

70.40

76.20

Diluted earnings

70.40

76.20

 

All activities were with respect to continuing operations.

The notes on pages 10 to 19 are an integral part of these condensed consolidated interim financial statements.

New World Resources Plc

Consolidated statement of financial position

 

31 March

31 December

31 March

EUR thousand

2015

2014

2014

 

 

 

 

ASSETS

 

 

 

Property, plant and equipment

319,477

322,374

522,879

Accounts receivable

2,033

3,062

4,495

Deferred tax

-

-

44,061

Restricted deposits

21,140

22,037

21,996

TOTAL NON-CURRENT ASSETS

342,650

347,473

593,431

 

 

 

 

Inventories

57,989

40,841

51,187

Accounts receivable and prepayments

60,423

64,219

70,223

Derivatives

-

2,629

-

Income tax receivable

-

-

2,242

Cash and cash equivalents

84,095

128,035

158,792

TOTAL CURRENT ASSETS

202,507

235,724

282,444

 

 

 

 

TOTAL ASSETS

545,157

583,197

875,875

 

 

 

 

EQUITY

 

 

 

Share capital

108,458

108,458

105,900

Share premium

142,363

142,363

2,368

Foreign exchange translation reserve

30,081

28,779

30,666

Restricted reserve

-

-

121,614

Equity-settled share based payments

15,926

15,868

15,239

Merger reserve

(1,631,161)

(1,631,161)

(1,631,161)

Other distributable reserve

1,684,463

1,684,463

1,684,463

Retained earnings

(482,962)

(508,638)

(636,000)

TOTAL EQUITY

(132,832)

(159,868)

(306,911)

 

 

 

 

LIABILITIES

 

 

 

Provisions

147,502

147,567

166,062

Long-term loans

83,784

83,726

34,720

Bonds issued

277,926

325,669

761,478

Employee benefits

36,355

36,956

47,497

Deferred revenue

592

747

1,601

Deferred tax

805

801

814

Other long-term liabilities

230

300

444

Cash-settled share-based payments

346

146

1,137

Derivatives

1,169

2,408

5,836

TOTAL NON-CURRENT LIABILITIES

548,709

598,320

1,019,589

 

 

 

 

Provisions

6,380

2,867

5,570

Accounts payable and accruals

104,985

130,989

120,953

Accrued interest payable

10,707

4,341

20,978

Derivatives

6,942

6,299

1,738

Income tax payable

198

168

352

Current portion of long-term loans

-

-

13,601

Cash-settled share-based payments

68

81

5

TOTAL CURRENT LIABILITIES

129,280

144,745

163,197

 

 

 

 

TOTAL LIABILITIES

677,989

743,065

1,182,786

 

 

 

 

TOTAL EQUITY AND LIABILITIES

545,157

583,197

875,875

 

The notes on pages 10 to 19 are an integral part of these condensed consolidated interim financial statements.

New World Resources Plc

Consolidated statement of cash flows

 

Three-month period

ended 31 March

EUR thousand

2015

2014

(restated)

 

 

 

 

Cash flows from operating activities

 

 

 

Profit / (loss) before tax

25,519

(25,829)

 

Adjustments for:

 

 

 

Depreciation and amortisation

10,893

20,136

 

Changes in provisions

1,376

(947)

 

Changes in inventory allowance

2,123

220

 

(Gain) / loss on disposal of property, plant and equipment

(11)

45

 

Interest expense, net

8,845

15,699

 

Change in fair value of derivatives

2,033

(464)

 

Change in fair value of Convertible Notes

(49,313)

-

 

Capital restructuring

-

2,344

 

Equity-settled share-based payment transactions

58

31

 

Operating cash flows before working capital changes

1,523

11,235

 

 

 

 

 

(Increase) in inventories

(19,271)

(21,726)

 

Decrease in receivables

4,827

20,456

 

(Decrease) in payables and deferred revenue

(14,837)

(19,758)

 

Decrease in restricted cash and restricted deposits

1,051

1,734

 

Currency translation and other non-cash movements

(127)

125

 

Cash generated from operating activities

(26,834)

(7,934)

 

 

 

 

 

Interest paid

(721)

(10,913)

 

Corporate income tax paid

(68)

(17)

 

Net cash flows from operating activities

(27,623)

(18,864)

 

 

 

 

 

Cash flows from investing activities

 

 

 

Interest received

7

358

 

Purchase of land, property, plant and equipment

(14,553)

(11,757)

 

Proceeds from sale of property, plant and equipment

11

5

 

Proceeds from disposal of discontinued operations

-

7,000

 

Net cash flows from investing activities

(14,535)

(4,394)

 

 

 

 

 

Cash flows from financing activities

 

 

 

Transaction costs related to capital restructuring

(1,909)

(1,573)

 

Net cash flows from financing activities

(1,909)

(1,573)

 

 

 

 

 

Net effect of currency translation

127

(42)

 

 

 

 

 

Net decrease in cash and cash equivalents

(43,940)

(24,873)

 

 

 

 

 

Cash and Cash Equivalents at the beginning of period

128,035

183,665

 

Cash and Cash Equivalents at the end of period

84,095

158,792

 

 

The notes on pages 10 to 19 are an integral part of these condensed consolidated interim financial statements.


New World Resources Plc

Consolidated statement of changes in equity

EUR thousand

Share capital

Share premium

Foreign exchange translation reserve

Restricted reserve

Equity-settled share- based payments

Merger reserve

Other distributable reserve

Retained earnings

Consolidated group total

Balance at 1 January 2015

108,458

142,363

28,779

-

15,868

(1,631,161)

1,684,463

(508,638)

(159,868)

Profit for the period

-

-

-

-

-

-

-

25,676

25,676

Total other comprehensive income, net of tax

-

-

1,302

-

-

-

-

-

1,302

Total comprehensive income for the period

-

-

1,302

-

-

-

-

25,676

26,978

Transaction with owners recorded directly in equity

 

 

 

 

 

 

 

Share options for A Shares

-

-

-

-

58

-

-

-

58

Total transactions with owners

-

-

-

-

58

-

-

-

58

Balance at 31 March 2015

108,458

142,363

30,081

-

15,926

(1,631,161)

1,684,463

(482,962)

(132,832)

 

Balance at 1 January 2014

105,863

2,368

30,897

121,680

15,421

(1,631,161)

1,684,463

(609,629)

(280,098)

Loss for the period

-

-

-

-

-

-

-

(26,664)

(26,664)

Total other comprehensive income, net of tax

-

-

(231)

(66)

-

-

-

-

(297)

Total comprehensive income for the period

-

-

(231)

(66)

-

-

-

(26,664)

(26,961)

Transaction with owners recorded directly in equity

 

 

 

 

 

 

 

Issue of A Shares under Deferred bonus plan

37

-

-

-

(213)

-

-

293

117

Share options for A Shares

-

-

-

-

31

-

-

-

31

Total transactions with owners

37

-

-

-

(182)

-

-

293

148

Balance at 31 March 2014

105,900

2,368

30,666

121,614

15,239

(1,631,161)

1,684,463

(636,000)

(306,911)

 

The notes on pages 10 to 19 are an integral part of these condensed consolidated interim financial statements.


New World Resources Plc
Operating and Financial Review
for the three-month period ended 31 March
2015 (‘3M 2015’)

 

1      Corporate Information

New World Resources Plc (‘NWR’ or the ‘Company’) is a public limited liability company with its registered office at One Silk Street, London EC2Y 8HQ, United Kingdom.

These condensed consolidated interim financial statements comprise the Company and its subsidiaries (together the ‘Group’). The Group is primarily involved in coal mining. The objective of the Company is to act as a holding company and to provide management services for the Group.

2      Financial Results Overview

Revenues. The Group’s revenues decreased by 22% from EUR 173 million in 3M 2014 to EUR 135 million in 3M 2015. This is mainly attributable to lower sales volumes of both coking coal and thermal coal, exacerbated by lower coal prices.

Cost of sales. Cost of sales decreased from EUR 147 million to EUR 123 million or by 16% in 3M 2015 compared to 3M 2014. This is mainly attributable to:

  • lower depreciation following the impairment charge recognised in 2014;
  • lower maintenance works undertaken in 2015;
  • lower production and lower input costs per equipped coal panel resulting in lower consumption of mining material and spare parts; and
    • decrease in headcount, resulting in lower personnel expenses.  

Selling expenses. Selling expenses decreased from EUR 16 million to EUR 10 million or by 37% in 3M 2015, attributable to lower sales volumes and lower transport prices.

Administrative expenses. Administrative expenses of EUR 15 million decreased from EUR 18 million (after the reclassification of capital restructuring costs) or by 15%, attributable to savings in advisory expenses and decrease in administrative headcount, resulting in lower personnel expenses.   

EBITDA. 3M 2015 saw a negative EBITDA of EUR 2 million, a decrease of EUR 14 million compared to positive EBITDA of EUR 12 million recorded in 3M 2014, attributable mainly to the decrease in revenues, partially offset by the decrease in operating expenses.

Finance income. Increase in finance income of EUR 51 million is attributable to EUR 49 million movement in the fair value of the Convertible Notes (financial instrument recognised at fair value through profit or loss) between 31 December 2014 end and 31 March 2015.

Profit for the period and underlying loss. The reported profit for the period is EUR 26 million, compared to the loss of EUR 27 million in 3M 2014. Excluding the impact of the movement in the fair value of the Convertible Notes, the Group would recognise a loss of EUR 24 million in 3M 2015.

3      Basis of Presentation

The condensed consolidated interim financial statements (the ‘financial statements’) presented in this document are prepared:

  • for the three-month period ended 31 March 2015, with the three-month period ended 31 March 2014 as the comparative period;
  • based on the recognition and measurement criteria of International Financial Reporting Standards as adopted by European Union (‘adopted IFRS’) and on the going concern basis (see further on next page); and
  • in accordance with IAS 34 Interim Financial Reporting.

The financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements as at and for the year ended 31 December 2014, which are contained within the 2014 Annual Report and Accounts of the Company, available on the Group’s website at www.newworldresources.eu.

 

 

 

Going concern basis of accounting

The Group manages its liquidity through cash (EUR 84 million (31 December 2014: EUR 128 million)) and receivable financing. The new senior secured notes and the new convertible notes have features which would result in interest being able to be paid in kind rather than in cash in certain circumstances.  

At the present market prices for coal, the Group is currently cash flow negative and the current low coal price environment has placed significant pressure on the Group’s liquidity position and also on its solvency resulting in the Group having net liabilities of EUR 133 million at 31 March 2015.

Based on the current projections, the Directors consider that the Group has sufficient cash available to meet its funding requirements for at least the next 12 months following the date of this report.

There is a risk that the cash available to the Group is not sufficient for funding requirements over this period. In particular, in the event of unexpected production or other operating issues, or further deterioration in coal prices (although coal prices are fixed for most of the Group’s anticipated 2015 sales, the Group is exposed to prices on approximately 25% of its coking coal sales in 2015 and to all sales in 2016), the Group could run out of cash in Q4 2015. The EUR 35 million Super Senior Credit Facility, which is fully drawn, requires the Group to maintain a minimum cash balance of EUR 40 million and this is first tested as at 31 October 2015.  Although the Group’s projections indicate that it would have more than this minimum cash balance, the excess over this amount is limited and the Group would have very little flexibility to manage the position. If this were to occur, the ECA Facility would also be capable of acceleration and, should that acceleration be reasonably probable, all of the remaining debt of the Group could become immediately repayable. In those circumstances, if it were able to, the Group would most likely repay any amount outstanding under the Super Senior Credit Facility prior to 31 October 2015 which would result in a minimal amount of cash being available.

In the event that it becomes likely that there will be a shortfall in available cash, the Group proposes to seek alternative sources of liquidity, which could include the sale of the assets of OKD and NWR Karbonia, or raising additional debt (to the extent permitted by the New Senior Notes Indenture, the Super Senior Credit Facility and the ECA Facility) or equity or, if no viable alternative solutions are then available, attempting to sell OKD and NWR Karbonia thus effectively liquidating the Group’s assets. 

The Directors recognise that these circumstances represent a material uncertainty that may cast significant doubt as to the Group’s and the Company’s ability to continue as a going concern and that they may be unable to realise all of their assets and discharge all of their liabilities in the normal course of business.  Nevertheless, the Directors expect that the risks associated with a deterioration in coal prices and/or other operating issues have been appropriately taken into consideration and accordingly the financial statements have been prepared on a going concern basis and do not include the adjustments that would result if the Group and the Company were unable to continue as a going concern.

4      Significant Accounting Policies

The financial statements have been prepared under the historical cost convention, except for certain financial instruments, which are stated at fair value. 

The financial statements have been prepared on the basis of accounting policies and methods of compilation consistent with those applied in the consolidated financial statements as at and for the year ended 31 December 2014, with the exception described below.  

New standards and interpretations

The Group adopted the following new interpretation, which are effective for its accounting period starting 1 January 2015:

  • IFRIC 21 Levies (effective 17 June 2014)

The adoption of the new interpretation has no impact on the recognised assets, liabilities and comprehensive income of the Group.

Change in presentation

For the three month period ended 31 March 2014, the Group has changed the classification of the expenses associated with capital restructuring in the consolidated statement of comprehensive income to better align with the basis of classification used by the Group in the 2014 Annual Report and Accounts of the Company.  The reclassification has no impact on the consolidated net loss.

Estimates

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these financial statements, the significant judgements made by the management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements of the Company as at and for the year ended 31 December 2014.

5      Non-IFRS Measures

The Company defines:

  • EBITDA as net profit/loss before income tax, net finance costs, depreciation and amortisation, impairment of property, plant and equipment (‘PPE’) and gains/losses from the sale of PPE;
  • Underlying profit/loss as profit/loss before material one off impacts;
  • Net debt as total debt (carrying amounts of all its issued bonds and long-term interest-bearing borrowings) less cash and cash equivalents.   

While the amounts included in EBITDA are derived from the Group's financial statements, it is not a financial measure determined in accordance with adopted IFRS and should not be considered as an alternative to net income or operating income as a sole indication of the Group's performance or as an alternative to cash flows as a measure of the Group's liquidity. The Company currently uses EBITDA in its business operations to, among others, evaluate the performance of its operations, develop budgets and measure its performance against those budgets.

6      Exchange Rates

EUR/CZK

3M 2015

3M 2014

y/y %

Average exchange rate

27.624

27.442

1%

End of period exchange rate

27.533

27.442

0%

Throughout this document, financial results and performance in both the current and comparative periods are expressed in Euros. Financial results and performance could differ considerably if presented in CZK. The Company may where deemed relevant, present variances using constant foreign exchange rates (constant currency basis), marked ‘ex-FX’, excluding the estimated effect of currency translation differences. These are non-IFRS financial measures.

7      Financial Performance

Revenues

The Group's largest source of revenue is the sale of coking coal, which accounted for 67% of total revenues in 3M 2015, whilst the sale of thermal coal accounts for 23% of total revenues in this period.

EUR thousand

3M 2015

3M 2014

y-y

y/y %

ex-FX

External coking coal sales (EXW)*

90,223

112,627

(22,404)

(20%)

(20%)

External thermal coal sales (EXW)*

31,552

39,978

(8,426)

(21%)

(21%)

Coal transport

6,210

11,937

(5,727)

(48%)

(48%)

Sale of coal by-products

4,247

4,809

(562)

(12%)

(11%)

Other revenues

3,017

3,184

(167)

(5%)

(5%)

Total revenues

135,249

172,535

(37,286)

(22%)

(21%)

*For the purpose of this analysis, where the Group sells products on an EXW or similar basis, the notional transport element is shown separately in order to separate the impact of changing transport revenues from changes in the underlying achieved price for the products sold.

Total revenues decreased by 22% mainly as a result of lower sales volumes of both coking coal and thermal coal, as well as lower realised prices (see table below). Lower sales volumes and lower transport charges also resulted in a decrease of transport revenues, with a similar decrease in transport costs, for no material impact on profitability.

Average realised sales prices

EUR per tonne

3M 2015

3M 2014

y-y

y/y %

ex-FX

Coking coal (EXW)

90

91

(1)

(1%)

0%

Thermal coal (EXW)

56

60

(4)

(7%)

(7%)

The majority of both coking coal and thermal coal sales are priced on a calendar year basis in 2015, while in 2014 the Group’s coking coal sales were priced on quarterly basis.

Total production of coal in 3M 2015 decreased by 20% compared to 3M 2014, while sales volumes reduced by 18%.

Coal inventories increased by 207kt in 3M 2015, caused mainly by subdued thermal coal market, compared to an increase by 314kt in 3M 2014.

Coal performance indicators (kt)

3M 2015

3M 2014

y-y

y/y %

Coal production

1,778

2,226

(448)

(20%)

External coal sales

1,565

1,906

(341)

(18%)

Coking coal

999

1,243

(244)

(20%)

Thermal coal

566

663

(97)

(15%)

Period end inventory*

875

694

181

26%

* Inventory consists of coal available for immediate sale and coal that has to be converted from raw coal. Opening and closing inventory balances do not always reconcile due to various factors such as production losses.

Cost of Sales

EUR thousand

3M 2015

3M 2014

y-y

y/y %

ex-FX

Consumption of material and energy

44,514

52,238

(7,724)

(15%)

(14%)

  of which : mining material and spare parts

24,684

31,391

(6,707)

(21%)

(21%)

              : energy consumption

17,251

18,362

(1,111)

(6%)

(5%)

Service expenses

30,128

37,854

(7,726)

(20%)

(20%)

  of which : contractors

18,572

17,479

1,093

6%

7%

              : maintenance

3,519

12,176

(8,657)

(71%)

(71%)

Personnel expenses

52,623

55,953

(3,330)

(6%)

(5%)

Depreciation and amortisation

9,307

18,900

(9,593)

(51%)

(50%)

Net gain from material sold

(681)

(617)

(64)

10%

11%

Change in inventories of finished goods and work in progress

(14,929)

(20,338)

5,409

(27%)

(26%)

Other operating expenses

2,097

3,002

(905)

(30%)

(30%)

Total cost of sales

123,059

146,992

(23,933)

(16%)

(16%)

Excluding the change in inventories impact

137,988

167,330

(29,342)

(18%)

(17%)

Excluding the EUR 5 million year on year impact in change in inventories driven by the lower build-up of stock, cost of sales decreased by EUR 29 million, as a result of:

  • lower depreciation following the impairment charge recognised in 2014;
  • lower maintenance works undertaken in 2015;
  • lower production and lower input costs per equipped coal panel resulting in lower consumption of mining material and spare parts; and
  • a 6% decrease in the number of employees, resulting in lower personnel expenses. 

Selling Expenses

EUR thousand

3M 2015

3M 2014

y-y

y/y %

ex-FX

Transport costs

6,202

11,776

(5,574)

(47%)

(47%)

Personnel expenses

927

658

269

41%

41%

Allowance for inventories on stock

1,179

614

565

92%

93%

Other expenses

1,582

2,597

(1,015)

(39%)

(39%)

Total selling expenses

9,890

15,645

(5,755)

(37%)

(37%)

Lower sales volumes combined with lower transport charges resulted in a reduction in transport costs by 47%, with a similar decrease in transport revenues, with no material impact on profitability.

 

 

 

Administrative Expenses

EUR thousand

3M 2015

3M 2014 (restated)

y-y

y/y %

ex-FX

Personnel expenses

9,328

10,403

(1,075)

(10%)

(10%)

Service expenses

3,254

4,804

(1,550)

(32%)

(32%)

Other expenses

2,879

3,014

(135)

(4%)

(4%)

Total administrative expenses

15,461

18,221

(2,760)

(15%)

(15%)

The decrease in administrative expenses is attributable to savings in advisory expenses and a decrease in administrative headcount, resulting in lower personnel expenses.

The Group has re-allocated those costs associated with the capital restructuring incurred in 3M 2014 of EUR 2 million into its own expense classification.

Total Personnel Expenses and Headcount

EUR thousand

3M 2015

3M 2014

y-y

y/y %

ex-FX

Personnel expenses

63,642

68,935

(5,293)

(8%)

(7%)

Employee benefit provision

(870)

(1,784)

914

(51%)

(51%)

Share-based payments

238

12

226

-

-

Total personnel expenses

63,010

67,163

(4,153)

(6%)

(6%)

Total personnel expenses have reduced principally through lower headcount (see below).

 

3M 2015

3M 2014

y-y

y/y %

 

Employees headcount (average)

10,914

11,615

(701)

(6%)

 

Contractors headcount (average)

3,268

3,035

233

8%

 

Total headcount (average)

14,182

14,650

(468)

(3%)

 

EBITDA

EUR thousand

3M 2015

3M 2014 (restated)

y-y

y/y %

ex-FX

EBITDA

(2,416)

12,247

(14,663)

-

-

The Group’s EBITDA decreased by EUR 14 million compared to 3M 2014 mainly as a result of the decrease in revenues, partially offset by the decrease in operating expenses.

As EBITDA is a non-IFRS measure, the following table provides a reconciliation of EBITDA from net profit/loss after tax.

EUR thousand

3M 2015

3M 2014 (restated)

Net profit / (loss)

25,676

(26,664)

Income tax

(157)

835

Net financial expenses

(38,817)

15,551

Capital restructuring

-

2,344

Depreciation and amortisation

10,893

20,136

(Gain) / loss from sale of PPE

(11)

45

EBITDA

(2,416)

12,247

 

 

 

 

 

 

Finance Income and Expense

EUR thousand

3M 2015

3M 2014

y-y

y/y %

 

Finance income

54,262

2,458

51,804

-

 

Fair value revaluation of Convertible Notes

49,313

-

49,313

-

 

Realised and unrealised foreign exchange gains

4,216

1,110

3,106

280%

 

Profit on derivative instruments

667

780

(113)

(14%)

 

Other finance income

66

568

(502)

(88%)

 

Finance expense

15,445

18,009

(2,564)

(14%)

 

Interest expenses

8,856

16,108

(7,252)

(45%)

 

Realised and unrealised foreign exchange losses

3,383

560

2,823

504%

 

Losses on derivative instruments

3,116

1,192

1,924

161%

 

Other finance expenses

90

149

(59)

(40%)

 

Convertible Notes were initially designated as fair value through profit or loss (‘FVTPL’) and EUR 49 million represents the movement in the fair value of the Convertible Notes between 31 December 2014 and 31 March 2015.

The decrease in interest expenses reflects the exchange of existing notes (nominal EUR 775 million) for new notes (nominal EUR 450 million) as part of the Capital Restructuring completed on 7 October 2014.

Profit / Loss before Tax

The profit before tax in 3M 2015 was EUR 26 million, up EUR 52 million compared to a loss of EUR 26 million in 3M 2014.

Income Tax

The Group recorded a net income tax benefit of EUR 157 thousand in 3M 2015, compared to a net income tax expense of EUR 835 thousand in 3M 2014.

The Group has accumulated tax losses for which no deferred tax asset is recognised as it is not probable that these losses would be recoverable.

Profit / Loss for the period

The Group recognised a profit of EUR 26 million in 3M 2015, which represents an increase of EUR 53 million, compared to the loss of EUR 27 million in 3M 2014.

8      Earnings / Loss per Share

The calculation of earnings/loss per share was based on profit/loss attributable to the shareholders of the Company and a weighted average number of shares outstanding during the presented period:

EUR thousand

3M 2015

3M 2014

Profit / (loss) for the period

25,676

(26,664)

Profit / (loss) attributable to A shares

24,953

(27,444)

Profit attributable to B shares

704

762

Eliminations between Mining and Real Estate divisions

19

18

 

 

3M 2015

3M 2014 (restated)

Weighted average number of A shares (basic)

6,659,178,995

805,138,130

Weighted average number of A shares (diluted)

6,663,692,758

805,877,208

Weighted average number of B shares (basic)

10,000

10,000

Weighted average number of B shares (diluted)

10,000

10,000

 

 

9      Cash Flow

EUR thousand

3M 2015

3M 2014 (restated)

Net cash flows from operating activities

(27,623)

(18,864)

Net cash flows from investing activities

(14,535)

(4,394)

Net cash flows from financing activities

(1,909)

(1,573)

Net effect of currency translation

127

(42)

Total decrease in cash

(43,940)

(24,873)

Cash Flow from Operating Activities

Cash outflows arising from operating activities, after working capital changes and before interest and tax in 3M 2015 were EUR 27 million, EUR 19 million higher compared to cash outflows of EUR 8 million in 3M 2014, following lower EBITDA and lower level of receivable factoring.

Cash Flow from Investing Activities

Capital expenditures amounted to EUR 15 million in 3M 2015, an increase of EUR 3 million when compared to 3M 2014. Cash flow from investing activities in 3M 2014 was positively influenced by a release of EUR 7 million from an escrow account related to the sale of Coke segment in 2013 period (the Coke segment was sold for EUR 95 million with EUR 7 million paid on escrow account, which was released three months after the date of sale).

Cash Flow from Financing Activities

Cash flow from financing activities reflects the transaction costs in relation to the Capital Restructuring.

10   Borrowings, Liquidity and Capital Resources

The liquidity requirements of the Group arise primarily from the need to fund operating losses, working capital requirements and the need to fund capital expenditures. The principal uses of cash are anticipated to fund planned operating expenditures, capital expenditures, scheduled debt service requirements, and other distributions.

Indebtedness and liquidity

As at 31 March 2015, the Group held cash and cash equivalents of EUR 84 million and had indebtedness of EUR 362 million (carrying value), none of which is contractually repayable in the next 12 months. This results in a net debt position for the Group of EUR 278 million, 1% lower when compared to EUR 281 million as at 31 December 2014.

For more information about the review, liquidity and going concern basis of accounting please refer to note 3 Basis of Presentation. For more information about the terms and conditions of this indebtedness please refer to note 13 Contingencies and Other Commitments.

11   Financial Instruments

Financial assets and liabilities by category

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value where the carrying amount is a reasonable approximation of fair value (for example accounts receivable or accounts payable).

 

 

 

 

 

 

 

 

 

 

EUR thousand

31 March 2015

31 December 2014

31 March 2014

 

Carrying Value

Fair value

Carrying Value

Fair value

Carrying Value

Fair value

 

Level 1

Level 2

Level 1

Level 2

Level 1

Level 2

Financial assets:

 

 

 

 

 

 

 

 

 

At fair value through profit or loss

 

 

 

 

 

 

 

 

 

Embedded option

-

-

-

2,629

-

2,629

-

-

-

Loans and receivables

 

 

 

 

 

 

 

 

 

Long-term receivables

2,033

-

-

3,062

-

-

4,495

-

-

Accounts receivable and prepayments

60,423

-

-

64,219

-

-

70,223

-

-

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

Restricted deposits

21,140

-

-

22,037

-

-

21,996

-

-

Cash and cash equivalents

84,095

-

-

128,035

-

-

158,792

-

-

Total

167,691

 

 

219,982

 

 

255,506

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

At fair value through profit or loss

 

 

 

 

 

 

 

 

 

Interest rates derivatives

3,057

-

3,057

3,402

-

3,402

7,574

-

7,574

Convertible Notes

21,532

21,532

-

70,845

70,845

-

-

-

-

Contingent value rights

5,054

-

5,054

5,305

-

5,305

-

-

-

Cash-settled share-based payments

414

414

-

227

227

-

1,142

1,142

-

Other

 

 

 

 

 

 

 

 

 

Long-term loans including accrued interest

84,263

-

-

84,067

-

-

48,600

-

-

Bonds issued including accrued interest

266,622

187,875

-

258,824

236,125

-

782,456

 390,813

-

Other long-term liabilities

230

-

-

300

-

-

444

-

-

Accounts payable and accruals

104,985

-

-

130,989

-

-

120,674

-

-

Total 

486,157

 

 

553,959

 

 

960,890

 

 

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

Level 1

quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2

inputs other than quoted prices included within Level 1 that are observable for the asset or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3

inputs for the asset or liability that are not based on observable market data (unobservable inputs)

In order to determine the fair value of the financial instruments, the Company implements valuation techniques used by banks or uses third party professional valuators, in which all significant inputs were based on observable market data.

12   Segments and Divisions

The Group is organised into two divisions: the Mining Division (‘MD’) and the Real Estate Division (‘RED’). The Company had A Shares and B Shares outstanding for the presented periods. The A Shares and B Shares are tracking stocks, which are designed to reflect the financial performance and economic value of the MD and RED, respectively. Due to the public listing of the Company’s A shares, the Group provides divisional reporting showing separately the performance of the MD and RED. The main rights, obligations and relations between the RED and MD are described in the Divisional Policy Statement, available at the Company’s website www.newworldresources.eu. The divisional reporting, as such, is essential for the evaluation of the equity attributable for the listed part of the Group. The Group is primarily involved in coal mining and as such presents only one segment. The whole Mining Division represents the Coal segment.


Divisions

 

Three-month period ended 31 March 2015

 

Three-month period ended 31 March 2014 (restated)

 

EUR thousand

 

Mining division

 

Real Estate division

 

Eliminations & adjustments1

 

Group operations total

 

Mining division

 

Real Estate division

 

Eliminations & adjustments1

 

Group operations total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

135,249

 

99

 

(99)

 

135,249

 

172,535

 

104

 

(104)

 

172,535

Cost of sales

 

(123,181)

 

-

 

122

 

(123,059)

 

(147,118)

 

-

 

126

 

(146,992)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

12,068

 

99

 

23

 

12,190

 

25,417

 

104

 

22

 

25,543

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

(9,890)

 

-

 

-

 

(9,890)

 

(15,645)

 

-

 

-

 

(15,645)

Administrative expenses

 

(15,432)

 

(29)

 

-

 

(15,461)

 

(18,192)

 

(29)

 

-

 

(18,221)

Gain / (loss) from sale of property, plant and equipment

 

11

 

-

 

-

 

11

 

(45)

 

-

 

-

 

(45)

Other operating income

 

473

 

-

 

-

 

473

 

962

 

-

 

-

 

962

Other operating expenses

 

(621)

 

-

 

-

 

(621)

 

(528)

 

-

 

-

 

(528)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING (LOSS) / INCOME

 

(13,391)

 

70

 

23

 

(13,298)

 

(8,031)

 

75

 

22

 

(7,934)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

(2,387)

 

70

 

(99)

 

(2,416)

 

12,275

 

76

 

(104)

 

12,247

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance income

 

54,304

 

864

 

(906)

 

54,262

 

2,458

 

865

 

(865)

 

2,458

Finance expenses

 

(16,304)

 

(47)

 

906

 

(15,445)

 

(18,873)

 

(1)

 

865

 

(18,009)

Capital restructuring

 

-

 

-

 

-

 

-

 

(2,344)

 

-

 

-

 

(2,344)

Profit / (loss) before tax

 

24,609

 

887

 

23

 

25,519

 

(26,790)

 

939

 

22

 

(25,829)

Income tax benefit / (expense)

 

344

 

(183)

 

(4)

 

157

 

(654)

 

(177)

 

(4)

 

(835)

PROFIT / (LOSS) FOR THE PERIOD

 

24,953

 

704

 

19

 

25,676

 

(27,444)

 

762

 

18

 

(26,664)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets and liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total segment assets

 

526,048

 

44,745

 

(25,636)

 

545,157

 

862,468

 

41,996

 

(28,589)

 

875,875

Total segment liabilities

 

694,270

 

7,491

 

(23,772)

 

677,989

 

1,201,487

 

7,943

 

(26,644)

 

1,182,786

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Eliminations of transactions between the divisions (e.g. lease charges, service fees, annual fees for providing real estates).


13   Contingencies and Other Commitments

Contingent assets and liabilities

Contingent liabilities relate to several litigation proceedings. As inherent in such proceedings, outcomes cannot be predicted with certainty and there is a risk of unfavourable outcomes to the Group. The Group disputes all pending and threatened litigation claims of which it is aware and which it considers unjustified. No provision has been recognised as at 31 March 2015 for any of the litigation proceedings. At the date of these financial statements, based on advice of legal counsel, the management of the Group believes that the litigation proceedings have no significant impact on the Group’s financial position as at 31 March 2015. A summary of the main litigation proceedings is included in the 2014 Annual Report and Accounts of the Company. There have been no significant developments in any of these matters since.

Contractual obligations

The Group is subject to commitments resulting from its indebtedness. These result mainly from the borrowings drawn by the Group and Notes issued. The following table includes the contractual obligations resulting from the borrowings and Notes issued as at 31 March 2015 in nominal values.

EUR thousand

1/4/2015 - 31/3/2016

1/4/2016 - 31/3/2018

After 31/3/2018

Senior Secured Notes due 2020

-

-

300,000

Convertible Notes due 2020

-

-

150,000

ECA Facility

-

12,500

37,363

Super Senior Credit Facility

-

35,000

-

TOTAL

-

47,500

487,363

Interest is to be paid semi-annually on Senior Secured Notes due 2020 (fixed coupon rate of 8% p.a.). Subject to liquidity condition, the Group may elect to capitalise (‘PIK’ interest) all but not part of the accrued interest at a higher rate (11% until the second anniversary of issuance / 9% thereafter).

Interest is to be paid annually on Convertible Notes due 2020 (fixed coupon rate of 4% p.a.). The Group may elect to pay PIK interest at a rate of 8% p.a.

The interest rate on the ECA Facility is fixed and paid semi-annually, and is based on EURIBOR plus a fixed margin. The interest rate on the SSCF is fixed and paid quarterly, and is based on EURIBOR plus a fixed margin that is increasing each quarter by 1.5%.

The Group has contractual obligations to acquire property, plant and equipment in the total amount of EUR 17 million, all of which are spread within one year. The Group is also subject to contractual obligations under lease contracts in the total amount of EUR 4 million, of which EUR 1 million are short-term obligations.

14   Subsequent Events and Other Information

Senior Secured Notes due 2020 interest payment – PIK

In adherence to the indentures, the Group hasn’t paid interest on its Senior Secured Notes due 2020 for the interest period starting 1 November 2014 up to 1 May 2015 in cash, but has elected to pay all of the accrued interest in the form of PIK interest by issuing EUR 16.5 million additional notes, increasing the nominal value of Senior Secured Notes due 2020 to EUR 316.5 million. 

15   Certain Relationships and Related Party Transactions

Description of the relationship between the Group, CERCL Holdings Ltd (the controlling Shareholder) and entities affiliated to the CERCL Holdings Ltd. is included on pages 79-83 of the 2014 Annual Report and Accounts of NWR. There have been no substantive changes to the nature, scale or terms of these arrangements during the three-month period ended 31 March 2015.

Shareholders in Advanced World Transport (‘AWT’) group reached an agreement in 2014 for the sale of a majority stake in AWT group. The finalisation of the transaction, subject to the approval of regulators that cover several European markets, is expected during the first half of 2015. After the finalisation of the transaction AWT group will no longer be an affiliated company of the Group.

16   Principal Risk and Uncertainties

It is not anticipated that the nature of the principal risks and uncertainties that affect the business, and which are set out on pages 17 to 32 of the 2014 Annual Report and Accounts of the Group, will change within the remainder of the financial year. Going concern assumption is described in Note 3 of this document.

Forward Looking Statements

 

Certain statements in this document are not historical facts and are or are deemed to be ‘forward-looking’. The Company’s prospects, plans, financial position and business strategy, and statements pertaining to the capital resources, future expenditure for development projects and results of operations, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology including, but not limited to; ‘may’, ‘expect’, ‘intend’, ‘estimate’, ‘anticipate’, ‘plan’, ‘foresee’, ‘will’, ‘could’, ‘may’, ‘might’, ‘believe’ or ‘continue’ or the negatives of these terms or variations of them or similar terminology. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These forward-looking statements involve a number of risks, uncertainties and other factors that may cause actual results to be materially different from those expressed or implied in these forward-looking statements because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond the Company’s ability to control or predict. Forward-looking statements are not guarantees of future performances.

Factors, risk and uncertainties that could cause actual outcomes and results to be materially different from those projected include, but are not limited to, the following: risks relating to changes in political, economic and social conditions in the Czech Republic, Poland and the CEE region; future prices and demand for the Company's products and demand for the Group's customers' products; coal mine reserves; remaining life of the Group's mines; coal production; trends in the coal industry and domestic and international coal market conditions; risks in coal mining operations; future expansion plans and capital expenditures; the Group's relationship with, and conditions affecting, the Group's customers; competition; railroad and other transport performance and costs; availability of specialist and qualified workers; and weather conditions or catastrophic damage; risks relating to Czech or Polish law, regulations and taxation, including laws, regulations, decrees and decisions governing the coal mining industry, the environment and currency and exchange controls relating to Czech and Polish entities and their official interpretation by governmental and other regulatory bodies and by the courts; and risks relating to global economic conditions and the global economic environment. Additional risk factors are described in the Company’s 2014 Annual Report and Accounts. A failure to achieve a satisfactory capital structure for liquidity and solvency purposes would pose a significant risk of the Group ceasing to operate as a going concern.

Forward-looking statements speak only as of the date of this document. The Company expressly disclaims any obligation or undertaking to release, publicly or otherwise, any updates or revisions to any forward-looking statement contained in this report to reflect any change in its expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based unless so required by applicable law.

 

Amsterdam, 12 May 2015

 

Board of Directors

 


 

Directors’ Statement of Responsibility

We confirm that to the best of our knowledge:

  • the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union;
  • the three-month period management report includes a fair review of the information required by:

(a)

DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first three months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining nine months of the year; and

(b)

DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first three months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

 

The Board

 

The Board of Directors that served during all or part of the three-month period to 31 March 2015 and their respective responsibilities can be found on pages 51 to 59 of the 2014 Annual Report and Accounts of the Group.

Zdenek Bakala resigned from the Board with effect from 23 April 2015. He served as a Non-Independent Non-Executive Director from 8 April 2011. Charles Harman has been nominated to join the Board as a Non-Independent Non-Executive Director with effect from 23 April 2015.

Approved by the Board and signed on its behalf by

 

 

 

Marek Jelínek

Executive Director and Chief Financial Officer

12 May 2015

 

 

 

 

 

 

 

 

 

 



[1] Cash mining costs per tonne reflect the operating costs incurred in production of both coking and thermal coal. They are principally calculated by deducting the Change in inventories and D&A from the Cost of sales and then divided by total coal production. Further non-cash adjustments to Cost of sales may apply in the calculation.

[2] Lost Time Injury Frequency Rate (‘LTIFR’) represents the number of reportable injuries in NWR’s operations causing at least three days of absence per million hours worked, including contractors.

[3] All prices are expressed as blended averages between the different qualities both for coking and thermal coal and are ex-works. All of the announced prices are indicative prices, and are based on an exchange rate of EUR/CZK of 27.5. A range of factors including, but not limited to, exchange rate fluctuations, quality mix, timing of the deliveries and flexible provisions in the individual agreements, may influence final realised prices. The actual realised price for the period may therefore differ from the average prices announced.

[4]    More detail and analysis are in the Operating and Financial Review further in this document.

[5]    Cash mining costs per tonne reflect the operating costs incurred in production of both coking and thermal coal. They are principally calculated by deducting the Change in inventories and D&A from the Cost of sales and then divided by total coal production. Further non-cash adjustments to Cost of sales may apply in the calculation.

[6]    In Q1 2015 approx. 50% of coking coal sales were mid-volatility hard coking coal, 35% were semi-soft coking coal and 15% were PCI coking coal.

[7]    In Q1 2015 approx. 75% of thermal coal sales were thermal coal and 25% middlings.

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