New World Resources
Results for the nine-month period ended 30 September 2010
Amsterdam, 19 November 2010 - New World Resources N.V. ("NWR" or the "Company"), Central Europe's leading hard coal and coke producer, announces its financial results for the nine-month period ended 30 September 2010.
· On track to deliver production and sales targets for FY 2010
- Production of 11.5Mt of coal and 1Mt of coke
- External sales of 10.5Mt of coal (5.5Mt of coking coal and 5.0Mt of thermal coal) and 1.1Mt of coke
· Strong performance in October 2010, reaching production of 1,164kt of coal and 95kt of coke
· Demand remains robust with coking coal and coke particularly strong
· 9M 2010 results reflect higher revenues driven by increased coking coal and coke sales volumes and prices relative to 9M 2009
- Coal and coke production of 8,090kt and 732kt, respectively
- Total external sales of 7,566kt of coal and 812kt of coke, up 9% and 63% respectively, due to improved market conditions
- Consolidated revenues from continuing operations of EUR 1,124 million, up 45%. Coal mining segment revenues up 32%, coking segment revenues up 159%
- EBITDA from continuing operations of EUR 302 million, up 173% compared to 9M 2009; Q3 2010 EBITDA up 19% compared to Q2 2010
- Mining cash cost per tonne at EUR 73, up 6% on a constant currency basis compared to 9M 2009 and flat compared to H1 2010
- Adjusted earnings per A share of EUR 0.60 for 9M 2010
· Continued improvement in safety with LTIFR in mining operations down 23% in 9M 2010 compared to 9M 2009
· Debiensko project continues to make progress in terms of creation of the feasibility study team and advisors as well as land and infrastructure acquisition
· Proposed all cash offer for Bogdanka for a total consideration of PLN 3,427 million (approximately EUR 857 milion)
· Intention to reincorporate in the United Kingdom to secure FTSE index series eligibility, expected to be completed during the first half of 2011
"During the third quarter of 2010 we made significant progress in line with our stated strategy to improve efficiency and returns from our existing assets while exploring opportunities to expand our business and lead the consolidation of the coal and coke industry in Central and Eastern Europe.
Coal production was influenced by particular geological factors in some of the panels being mined during the period, ultimately resulting in lower than expected production for the quarter. During the period we also saw a temporary reduction in pig iron production in our region, which caused some of our customers to shift part of their coke orders into the fourth quarter. Nevertheless, we remain on track to achieve our full year production and sales targets of 11.5Mt and 10.5Mt of coal and 1.0Mt and 1.1Mt of coke, as these factors are not expected to recur in the fourth quarter and therefore should not impact our performance for the year as a whole. Our operations performed very strongly in October, producing 1,164kt of coal and 95kt of coke and we expect to continue at these run rates until the end of 2010, further underlining our ability to deliver on our objectives.
Our continuous focus on cost control has enabled us to hold our mining unit cash cost stable since the end of June 2010. These efforts will continue in parallel to our endeavours to deliver our full year production and sales targets.
NWR is reaping the benefits of its recent capital investment programmes. The new POP 2010 longwall equipment is producing an average of approximately 2,860t per longwall per day, an improvement of 72% in comparison to the old equipment, leading to more efficient and safer operations in our mines. Trial operations of the newly built coke battery began successfully in October 2010 and we are on track to conclude our COP 2010 programme by the end of the year.
Important steps are in train at our Polish investment projects, especially Debiensko, where we are establishing a world-class team and group of advisors to undertake the detailed feasibility study. In addition, land and infrastructure acquisition is also progressing. We expect to break ground in Debiensko during the course of 2011.
On 5 October we announced a fully funded all-cash offer for Polish thermal coal producer Lubelski Wegiel Bogdanka S.A. for a total consideration of approximately EUR 857 million. We believe that combining NWR and Bogdanka will create a leader in the Central European coal industry, benefitting from an enhanced reserve base, product and geographical diversification and complementary customer bases.
The combined group will have the scale and resources to be a powerful platform for regional consolidation. In that respect, there are a number of other opportunities both in Poland and other countries such as Ukraine, which NWR continues to explore and which may lead to a transformation of the coal industry in our region in the future.
Our all-cash offer represents compelling value for both NWR and Bogdanka shareholders. The subscription period runs until 29 November 2010 and an Extraordinary General Meeting of Shareholders ("EGM") seeking, amongst other things, shareholder approval for the proposed acquisition of Bogdanka, will be held on 24 November 2010. We have already obtained an irrevocable undertaking from our majority shareholder, BXR Mining, to vote in favour of the proposed acquisition at the EGM. On 16 November 2010 we also received the approval from the Polish competition authority in connection with the offer. Polish takeover rules permit NWR to waive the only remaining condition for completion of the Offer which is a minimum acceptance level of 75% of Bogdanka's issued share capital being tendered and we will review this option, if relevant, at the end of the subscription period.
On 5 October 2010, we also announced our intention to re-incorporate in the United Kingdom, which should allow FTSE series index eligibility. The proposed re-incorporation is designed to increase the attractiveness of the company's investment case to a broader universe of investors in Europe and globally. Subject to regulatory, tax and other clearances, the reincorporation is expected to be completed during the first half of 2011.
General market conditions continue to show positive signs and demand from steel companies and energy producers further confirms our optimism of a year ago about the medium and longer term outlook for the Central European region. Nevertheless, as previously noted, the regional market remains somewhat volatile as steel customers continue to exercise caution when placing orders.
Steel production in our customer markets rose by 36% in the nine-month period ended 30 September 2010 compared to the same period in 2009, according to the World Steel Association, although production remained 13% lower than in the same period in 2008.
The publication last month of our pricing update for Q4 2010 showed a slight softening of prices; nevertheless we believe there are positive dynamics for prices in the year ahead. We are currently negotiating our thermal coal pricing for 2011 with our customers and will update the market on this in due course."
Mike Salamon, Executive Chairman of NWR
NWR's senior management will hold a conference call today, Friday 19 November 2010, at 11:00 CET (10:00 GMT) to discuss the financial results for the period.
A live webcast of the call will also be made available on NWR's website at www.newworldresources.eu.
Dial in details:
The Netherlands +31 (0)20 707 5510
Czech Republic (Toll free) 800 142926
Poland (Toll free) 00 800 111 4858
UK & the rest of Europe +44 (0)20 7806 1955
USA +1 212 444 0413
Selected financial and operational data
(EUR thousand, unless otherwise stated)
Profit before tax(1)
Profit from continuing operations
Profit for the period
EBITDAfrom continuing operations(1)
of which: Coal mining(2)
Net cash flow from operations
Net working capital
Adjusted earnings per A share(3)(in EUR)
Coal and coke sales volumes(4)
Total coal production(4)
Period end coal inventories(4)
Period end coke inventories(4)
Average number of staff(5)
Lost-time Injury Frequency Rate - OKD(6)
Lost-time Injury Frequency Rate - OKK(7)
(1) From continuing operations, excluding electricity trading segment
(2) The Company's businesses are represented in three segments; "Coal mining segment", "Coking segment" and "Other". The full disclosure on all operational segments including the consolidation adjustments and eliminations as well as details on the segment accounting policies, measurement and disclosure is presented in the Operating and Financial Review for the nine-month period ended 30 September 2010.
(3) Adjusted to current number of shares, see also Earnings per Share section
(4) In thousands of tonnes
(5) Including contractors
(6) OKD, a.s. ("OKD") is a subsidiary of NWR
(7) OKK Koksovny, a.s. ("OKK") is a subsidiary of NWR
Please note that the table above excludes the results of the electricity trading segment, which is presented as discontinued operations in the financial statements (please refer to the Operating Financial Review for the nine-month period ended 30 September 2010 for further details). Under IFRS, part of NWR Energy a.s. ("NWR Energy") could not be classified as discontinued operations and this accounted for approximately EUR 10 million of EBITDA from continuing operations booked between January and June 2010.
Production & sales volumes
Coal performance indicators (kt)
Sales to OKK
Period end inventory
Total coal production in the first nine months of 2010 was 1% higher than in the same period of 2009. External coal sales increased by 9% due to improved market conditions in 2010, especially for coking coal.
Coking coal sales in the first nine months of 2010 comprised approximately 42% hard coking coal and 58% semi-soft coking coal. Thermal coal sales in the period were approximately 84% coal and 16% middlings.
Coal production in October 2010 amounted to 1,164kt and external coal sales amounted to 1,065kt. Given this excellent performance, NWR remains confident it can achieve its production and sales targets for the full year 2010.
Coal production and sales targets for 2010 of 11.5Mt and 10.5Mt, respectively, remain unchanged.
Coke performance indicators (kt)
Period end inventory
Coke production increased by 24% in the nine-month period ended 30 September 2010 compared to the same period in 2009, while coke sales increased by 63% due to significantly improved coke market conditions.
Coke sales in the first nine months of 2010 were approximately 56% blast furnace coke, 35% foundry coke and 9% other types.
Coke production and sales targets for 2010 remain unchanged at 1.0Mt and 1.1Mt, respectively. Sales product mix is expected to remain about the same as seen in the third quarter for the remainder of the year.
Average realised prices
% chg. Ex-FX
Prices for coking coal and coke increased in the nine-month period ended 30 September 2010, reflecting better economic conditions in the region in which NWR operates during the period compared to the same period in 2009.
NWR priced 80% of its coking coal tonnage on a Japanese Fiscal Year ("JFY") basis, with the remaining 20% priced quarterly.
The price agreed for JFY 2010 coking coal was an average of EUR 163 per tonne.
Quarterly priced coking coal amounts to approximately 190kt for delivery in the fourth calendar quarter of 2010 and comprises mostly semi-soft coking coal. The average price agreed for these deliveries was EUR 154 per tonne.
Thermal coal is sold on a calendar year basis and was priced at an average of EUR 65 per tonne for the calendar year 2010.
All of NWR's coke sales are priced on a quarterly basis.
The average price agreed for coke sales during the fourth calendar quarter of 2010 was EUR 331 per tonne. The expected sales volume for the period is approximately 280kt.
The above prices are based on an exchange rate of CZK/EUR 24.50.
% chg. Ex-FX
Coal mining segment(1)
(1) Includes internal sales
The Company's revenues increased by 45% in the first nine months of 2010 compared to the same period in 2009, due to increased sales volumes and prices of both coking coal and coke.
Change in inventories
In line with its accounting policy, NWR records inventory change at cost of production.
Inventory levels built up substantially during the nine-month period ended 30 September 2009, when demand was adversely affected by the wider economic crisis. Coal inventories increased by 436kt in the period, while coke inventories increased by 55kt. This resulted in a positive change in inventories of approximately EUR 30 million, which offset some of the decline in third party sales.
Conversely, during the nine-month period ended 30 September 2010, NWR reduced its coal inventories by 88kt and coke inventories by 129kt, as demand for both coking coal and especially coke recovered. This resulted in a negative change in inventories of approximately EUR 27 million.
In the fourth quarter of 2010, NWR expects inventory levels to further decrease compared to end of September 2010 levels, causing a further negative change in inventories. The Company expects year-end coal inventories to be below 200kt and coke inventories to further decline from current levels.
Main operating costs (comprising consumption of material and energy, service expenses and personnel expenses) from continuing operations increased by 17% in the period compared to the first nine months of 2009. The increase was mainly driven by higher consumption of materials and energy and higher services expenses, combined with the effect of the appreciation of the Czech Koruna against the Euro. Excluding the impact of the appreciation of the Czech Koruna, main operating expenses were up 14%.
% chg. Ex-FX
Consumption of material and energy
(1) Excluding employee benefits
Note: From continuing operations only. The electricity trading segment is classified and presented as discontinued operations (see Discontinued Operations section in the Operating and Financial Review for the nine-month period ended 30 September 2010).
Coal mining segment expenses
% chg. Ex-FX
Consumption of material and energy
Main expenses for the coal mining segment increased by 12%, or 8% excluding the impact of currency appreciation. The increase in consumption of materials and energy was mainly driven by continued intensive underground development works, which were once again partly offset by a 23% decrease (in EUR terms) in electricity prices in the Czech Republic. As the Company increases its production run rate in the fourth quarter in accordance with its full year production target, costs for consumption of materials and energy will increase accordingly in the period.
Service expenses, excluding transportation costs, grew by 27% in the coal mining segment mainly due to an increase in contractor expenses attributable to an increase in the number of shifts as well as an increase in maintenance expenses. Transportation costs, which rose 14%, are passed on to customers, impacting revenues correspondingly and thus have no impact on the bottom line.
Personnel expenses for the coal mining segment increased by 2% on a constant currency basis mainly due to a performance-related bonus paid in the second quarter on the back of good operational performance and successful price negotiations year-to-date. Management will consider paying a further similar bonus at year-end dependent on the operational and financial performance of the Company during the second half of 2010.
Mining cash costs per tonne
% chg. Ex-FX
Mining cash costs per tonne
Mining cash costs per tonne increased by 6% on a constant currency basis mainly due to higher consumption of materials and energy and service expenses in the period compared to the same period in 2009. Management's continued focus on controlling costs kept cash costs per tonne at the same level as the first half in the third quarter of 2010.
Mining cash costs per tonne reflect the operating costs incurred in mining both coking coal and thermal coal. The main line items included are consumption of material and energy, service expenses, personnel expenses and other operating expenses. It does not include cost of transportation.
Coking segment expenses
% chg. Ex-FX
Consumption of material and energy(1)
Third-party coal purchase charges
(1) Includes both internal and external coal purchase charges
Main expenses for the coking segment increased by 50%, or 45% excluding the impact of currency appreciation. The increase in consumption of materials and energy was mainly driven by increased purchases of third party coking coal as coke production was increased to meet higher demand. The cost of energy for coke production declined slightly, as an increase in the consumption of heat was more than offset by the decrease in electricity prices. Heat represented 53% of the energy costs for coke production in 9M 2010.
Excluding the impact of transportation costs, which are passed on to customers, service expenses for the coking segment grew by 4%, mainly due to increased maintenance works.
Personnel expenses for the coking segment decreased by 35% on a constant currency basis mainly related to a headcount reduction following the closure of one coking battery in 2009.
Coke conversion cash cost per tonne
% chg. Ex-FX
Coke cash cost per tonne
The decrease in coke conversion unit cash cost is mainly due to a 24% increase in coke production in the nine-month period ended 30 September 2010 compared to the same period in 2009.
Coke conversion cash cost per tonne reflects the operating costs incurred in converting coking coal into coke. It does not include the cost of internal or externally purchased coking coal. Transportation costs are not included.
EBITDA from continuing operations
% chg. Ex-FX
Coal mining segment
EBITDA from continuing operations of EUR 302 million for the nine-month period ended 30 September 2010 was 173% higher than in the same period in 2009 due to increased revenues, mainly on the back of higher sales volumes and higher realised prices for coking coal and coke in the period.
Operating income from continuing operations7
% chg. Ex-FX
Coal mining segment
Operating income from continuing operations for the period was EUR 181 million.
Profit before tax from continuing operations was EUR 171 million, including the gain on the sale of NWR Energy of EUR 82 million. Net financial expenses rose by 40% to EUR 93 million, primarily as a result of currency effects. This includes a one-off amortisation of expenses related to the Senior Secured Facility as well as a loss on settlement of interest rate derivatives, which together amounted to approximately EUR 15 million.
NWR recorded a net income tax expense of EUR 10 million in the nine-month period ended 30 September 2010 compared to a net income tax gain of EUR 2 million in the same period in 2009. The net expense in the current period is composed of a EUR 32 million income tax expense partly offset by a one-off tax reclaim in the amount of EUR 22 million, arising from the reversal of the Czech tax authority's position on certain interest expenses which were previously deemed non tax-deductible. The profit on the disposal of interest in subsidiaries held by the Company is tax exempt. The net income tax gain in 2009 was related to deferred tax assets from the tax loss incurred by the coking operations.
The adjusted earnings per A share for the nine-month period ended 30 September 2010 amounted to EUR 0.60.
Operating cash flow
Net operating cash flow for the nine-month period ended 30 September 2010 amounted to EUR 182 million, EUR 163 million higher than in the same period in 2009. This increase was mainly attributable to higher EBITDA, driven by increased sales, as well as a corporate tax rebate of EUR 22 million received in cash in the second quarter of 2010.
Efficiency gains & investment programmes
The POP 2010 capital investment programme, which was completed at the end of 2009, continues to deliver on its objectives as the new equipment shows improved performance compared to existing equipment and OKD is able to maintain coal production output with 17 operating longwalls as opposed to 20 in 2009.
The new equipment is delivering an average daily production per longwall of approximately 2,860t, an improvement of 72% in comparison to the previous technology, with some longwalls delivering daily average production as high as 4,900t.
Combining the performance of the new and existing equipment, overall longwall productivity in OKD rose by approximately 13% in the first nine months of 2010 to 1,700t/LW a day when compared to the average performance in 2009.
NWR's Coking Optimisation Programme 2010 ("COP 2010"), a EUR 63 million capital investment programme designed to improve the efficiency and productivity of the Company's coke operations is on track to be concluded by year-end.
The newly constructed coke battery No.10 at OKK's Svoboda plant started its trial operations in October 2010 and is scheduled to be running at full capacity by early 2011. Its capacity, together with that of the renovated battery No. 8 and the other two operating batteries in Svoboda, will be 850kt in total from 2011 onwards. When fully operational, the new battery will help lower unit conversion costs and also enable the company to react more flexibly to demand for foundry and blast-furnace coke.
As part of the programme, all coking production is being consolidated at Svoboda, with production at the Jan Sverma facility fully shut down by the end of 2010. Approximately 50% of Sverma's workforce will be relocated to work on the Svoboda plant, while the remaining 50% will leave the Company by the end of the year by mutual agreement.
Polish development projects: Debiensko and Morcinek
As previously announced, NWR continues to execute a detailed development schedule for its Debiensko project in Poland. The work on Debiensko focuses on four different elements: the creation of the owner's team and the appointment of the consultants and engineering contractors who will complete the detailed feasibility study, geological exploration, engineering work and land and infrastructure acquisition - all of which continue to make good progress and are part of the initial EUR 25 million investment in the project, as previously announced.
To date, nine boreholes at planned future shaft and/or decline locations have been drilled and documented. The Company expects to drill three additional surface boreholes along planned declines by the end of 2010.
The Definitive Feasibility Study (DFS), which will map out the project scope, execution plan, budget and schedule as well as a significant proportion of the engineering for the Debiensko project commenced in September 2010 and the first stage is expected to be completed in March 2011. This comprises the surface infrastructure and processing plant, as well as the access and coal conveying declines. The engineering contracts for these elements of the DFS have, in large measure, already been awarded to both Polish and international firms.
In terms of land and infrastructure, NWR has already acquired an electrical supply line and related substation and two parcels of land (7.2 hectares) from the Czerwionka -Leszczyny municipality. Further acquisitions of electrical infrastructure and land are planned for the near future.
NWR expects to break ground in Debiensko during the course of 2011.
Work on our Morcinek project also continues to make progress. After being granted the exploration license amendment by the Environmental Ministry in Poland, NWR will drill further exploration boreholes in the beginning of 2011. Further underground exploration works are planned for early 2011 and geological documentation is expected to be completed by the end of 2011 for submission to the Polish Ministry of Environment.
Health and safety
NWR has stringent and sophisticated safety procedures, monitoring systems and practices in place throughout its mines and coking plants. These are applied rigorously and diligently at all times to ensure optimal operating conditions in underground hard coal mining at depth. In this way, NWR endeavours to better manage geological hazards arising, inter alia, from rock stresses and methane, in order to provide a safer working environment for its people.
Regrettably, despite the overall improvement in the safety trend, two of our people died in accidents at work during the nine-month period ended 30 September 2010. All accidents are investigated by a committee comprised of members of the Ostrava Mining Authority, the mine management, OKD management, the trade union and the local police. Appropriate measures are taken based on the findings of these investigations.
Time lost due to injuries is an internationally recognised measure of the effectiveness of general safety procedures in force at any time and, in this respect, NWR's safety record is comparable to industry standards. The Lost Time Injury Frequency Rate (LTIFR) at OKD improved by 23% to 8.57 in 9M 2010, compared to 11.18 in 9M 2009.
At OKK, LTIFR improved by 20% to 2.50 in the nine-month period ended 30 September 2010, compared to 3.11 in the same period in 2009.
The previously announced "SAFETY 2010" programme aims to further improve safety conditions in OKD's mines, mainly by replacing current personal protection devices with new and better quality gear. The programme is expected to be completed by the end of 2010, with the total investment amounting to approximately EUR 17 million.
The Czech Koruna appreciated against the Euro by approximately 4% between the nine-month period ended 30 September 2009 and the same period in 2010. The average exchange rate for the period was CZK/EUR 25.45.
Approximately 50% of the Company's revenues and almost 100% of its operating costs are denominated in CZK.
The Company's current policy is to hedge approximately 70% of its cash flow exposure to currency fluctuations. Approximately 84% of the forecast cash flow exposure for the period between October and December 2010 is currently covered by forward currency contracts.
Liquidity and capital resources
As at 30 September 2010, the Company's net debt was EUR 370 million, down 24% from 31 December 2009, with no significant debt maturities until 2015.
Unrestricted cash on hand amounted to EUR 484 million at 30 September 2010, down from EUR 548 million at 31 December 2009, as approximately EUR 186 million of cash, together with the net proceeds from the issuance of the 7.875% Senior Secured Notes, was used to repay in full the outstanding amounts under NWR's Senior Secured Loan facilities, accrued interest and fees.
The restricted payment basket, as defined by the 7.375% Indenture and the 7.875% Indenture, amounts to approximately EUR 237 million as of 30 September 2010 and it does not reflect the EUR 55 million interim dividend paid out on 22 October 2010.
For more information, please refer to the Liquidity and Capital Resources section in the notes of the Operating and Financial Review for the nine-month period ended 30 September 2010.
Total capital expenditure in 9M 2010 was 19% below 9M 2009 levels primarily as a result of the completion of the POP 2010 investment programme. All POP 2010 related CAPEX in the first nine months of 2010 are deferred payments from the previous year.
NWR expects CAPEX for FY 2010 to be approximately EUR 200 million, mainly comprising deferred payments for POP 2010, COP 2010 and maintenance CAPEX.
CAPEX (EUR million)
Projects in Poland
(1) Does not refer to an actual acquisition of assets, but are deferred payments for the assets acquired under POP 2010 in 2009.
Proposed all cash offer to acquire Bogdanka
On 5 October 2010, NWR announced an all-cash offer to acquire all of the issued and outstanding shares of Lubelski Wegiel "Bogdanka" S.A. ("Bogdanka") for PLN 100.75 in cash per Bogdanka share (the "Offer"), amounting to PLN 3,427 million in total (approximately EUR 857 million).
The Offer price represents a premium of 13% over the closing price of PLN 89.20 per Bogdanka share on 4 October 2010. It is also a premium of 26% and 31% to the volume-weighted average trading prices of the Bogdanka shares on the WSE for the 3-month and the 6-month trading periods ended on the same date, of PLN 80.13 and PLN 77.16, respectively. NWR believes that the proposed acquisition will be earnings per share accretive in the first year of consolidation.
The acquisition is consistent with NWR's strategy to maintain its market leading position in the Central European region by actively pursuing growth opportunities in Poland and the rest of Central and Eastern Europe and is another step in realising NWR's vision set out at the time of the IPO to become a regional consolidator. The combination of NWR and Bogdanka will create a regional champion, with an enhanced reserve base, product and geographical diversification and a strong regional identity.
The Offer is fully funded and provides Bogdanka shareholders with immediate liquidity at an attractive valuation. Furthermore, a possible future NWR equity offering would seek to provide an opportunity for certain Bogdanka's institutional shareholders to re-invest in the combined group.
The total amount of funds required to consummate the Offer is PLN 3,427 million (approximately EUR 857 million). In addition to committing EUR 300 - 400 million from its own cash resources, NWR has entered into a committed bridge loan facility agreement for the purpose of meeting the funding requirements of the transaction.
The Offer is open for acceptance until 29 November 2010. Completion is conditional upon a minimum of 25,510,193 Bogdanka shares (representing 75% of Bogdanka's issued share capital) being tendered in acceptance of the Offer. If relevant, NWR will consider waiving the acceptance threshold, as permitted by Polish take over rules.
On 16 November 2010, NWR announced it received the approval from the Polish Office of Competition and Consumer Protection to acquire all of the issued and outstanding shares of Bogdanka, and there are no further regulatory approvals required in relation to the offer.
Intention to reincorporate in the United Kingdom
NWR also announced on 5 October 2010 its intention to re-incorporate in the United Kingdom. The Company believes that this should allow FTSE series index eligibility. A feasibility study has been undertaken and, subject to further analysis and regulatory, tax and other clearances, the re-incorporation in the UK is expected in the first half of 2011. As a result, the enlarged group will benefit from increased scale and attractiveness to premium international capital markets investors.
On 13 October 2010, NWR published the Notice of the Extraordinary General Meeting of Shareholders, relating to the proposed acquisition of Bogdanka.
On 1 November 2010, NWR published a Supplementary Circular to Shareholders relating to NWR's proposed acquisition of Bogdanka. The purpose of the Supplementary Circular was to update Shareholders on the matters described in the Class 1 Circular posted on 13 October 2010, and, in particular, to provide information on a change to the conditions applying to the proposed acquisition.
Copies of the Notice of the Extraordinary General Meeting of Shareholders, the Explanatory Notes to the Agenda, the Class 1 Circular and the Supplementary Circular to Shareholders are available on the Company's website (www.newworldresources.eu) and are also available for review at NWR's office: Jachthavenweg 109h, 1081 KM Amsterdam, The Netherlands.
The Extraordinary General Meeting of Shareholders seeking, amongst other things, shareholder approval for the proposed acquisition, will be held on 24 November 2010 at 10:00 (CET) at The Dorint Hotel, Stationsplein ZW 951, 1117 CE Schiphol, Amsterdam, The Netherlands.
Steel production in NWR's customer markets rose by 36% in the nine-month ended 30 September 2010 compared to the same period in 2009, according to the World Steel Association, however it was still 13% lower compared to the same period in 2008.
General market conditions continue to show positive signs and demand from steel companies and energy producers further confirms the Company's positive near to medium term outlook for both these markets. Nevertheless, as previously noted the regional market remains somewhat volatile as steel customers continue to exercise caution when placing orders.
We are currently negotiating our thermal coal pricing for 2011 with our customers and will update the market on this in due course.
NWR will continue to focus on controlling mining unit operating costs while pressing ahead to achieve its full year production and sales targets. The Company had a very strong production performance in October 2010, further underlining its ability to deliver its objectives.
COP 2010 continues to progress on budget and is on track to be completed by the end of this year.
In the longer term, NWR remains committed to delivering on its corporate strategy to continuously improve efficiency and returns in its existing assets as well as continue to identify and explore opportunities to lead industry consolidation in the region.
Disclaimer and Cautionary Note on Forward Looking Statements and Notes on Certain Other Matters
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 facts 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 NWR'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 Company's customers' products; coal mine reserves; remaining life of the Company'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 Company's relationship with, and conditions affecting, the Company's customers; competition; railroad and other transportation 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 as described in the Company's annual report.
Forward-looking statements are made 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.
In this Quarterly Financial Report and the Operating and Financial Review for the nine month period ended 30 September 2010, the Company provides information that is required to be published in interim management statements under Directive 2004/109/EC, on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC, and the national laws implementing such Directive.
This document does not contain or constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities in the United States or in any other jurisdiction.
This document is not an offer of securities for sale in the United States. The securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that will contain detailed information about the Company and management, as well as financial statements. In member states of the European Economic Area any offer of securities of the Company will be directed at persons who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC) and to certain other persons to whom an offer can be made without the publication of a prospectus, or following the approval and publication of a prospectus if so required by applicable law.
Agnes Blanco Querido Radek Nemecek
Tel: +31 20 570 2270 Tel: +31 20 570 2244
Email: firstname.lastname@example.org Email: email@example.com
Tel: +31 65 476 4119
New World Resources N.V.
NWR is the sole owner of OKD, a.s., the Czech Republic's largest hard coal mining company and one of the largest producers in Central Europe by revenue and volume. Serving customers in the Czech Republic, Slovakia, Austria, Poland, Hungary and Germany, the Company produced 11Mt of coal and 843kt of coke in 2009.
Consolidated financial information for the nine-month period ended 30 September 2010
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