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KGHM's Q1 net profit slides 38% YOY on lower output, sales

KGHM Polska Miedz SA said May 15 that its consolidated first-quarter net profit fell 38% year over year to 439 million Polish zlotys, on the back of lower output and sales.

The company's payable copper, total precious metals and molybdenum production in the first quarter recorded respective drops of 12%, 29% and 17% year over year. Payable copper output in the quarter was 143,000 tonnes, total precious metals production was 38,600 troy ounces, and molybdenum output was 4.0 million pounds.

Sales declined to 133,400 tonnes of copper and 39,100 troy ounces of total precious metals in the period, representing year-over-year drops of 12% and 25%, respectively. Molybdenum sales rose 55% yearly to 4.1 million pounds.

KGHM's stand-alone net profit, reflecting its operations in Poland, slipped 34% on a yearly basis to 530 million zlotys, as electrolityc copper output declined by 15%.

The company's Sierra Gorda copper mine in Chile booked a net loss of US$66 million, almost flat year over year, as higher costs were offset by an increase in revenue due to rising metal prices.

Average copper price in the first quarter was up 19% year over year, the company noted.

According to a same-day report by Reuters, the company shut down the Sierra Gorda mine after a contractor died in an accident during routine maintenance work. The company notified authorities to initiate an investigation.

Sierra Gorda contributed 101,700 tonnes of Chile's 5.5 million-tonne total copper output in 2017. In March, KGHM flagged an 18% rise in output from Sierra Gorda to about 130,000 tonnes in 2019.

As of May 15, US$1 was equivalent to 3.62 Polish zlotys.