JSW feels the effects of COVID-19

EBITDA for the first half of 2020, net of non-recurring events, was PLN (-)67.5 million. In that period, the Group produced 6.7 million tons of coal and 1.6 million tons of coke. Notably, in H1 2020 the share of metallurgical coal and steam coal in total net production was 79 percent and 21 percent, respectively. This means that the production of metallurgical coal was 0.4 million tons higher than the year before.

The prices of metallurgical coal and coke for 6 months of the year were PLN 487.78 per ton and PLN 792.98 per ton, respectively. In H1 2020, sales revenues of the JSW Group were PLN 3.5 billion, i.e. 26.5 percent less than in the same period of 2019. This was the effect of lower sales and lower prices of coal, coke and hydrocarbons. The average sales prices commanded by the JSW Group for metallurgical coal were 30.4 percent lower, steam coal – 8 percent lower and coke – 31 percent lower.

- The COVID-19 pandemic reduced the consumption of steel in the entire European Union and in all regions of the world. Different kinds of restrictions (business, social etc.) implemented by governments since March 2020 had a significant influence on production activities and industry sectors using steel, especially the automotive sector. Steel production fell 18.7 percent in the European Union and 6 percent globally, which translated to a weaker demand for our metallurgical coal and coke. In the second quarter, the lower demand for coke was more pronounced, so, considering the situation in the European market, we increased significantly our coke shipments to overseas markets, acquiring new buyers as an alternative to the uncertain European market. Besides, we supply our clients mainly on the basis of long-term contracts, which have not been terminated, but only “periodically” limited and are likely to return to full performance after the restrictions caused by COVID-19 are lifted – Włodzimierz Hereźniak, President of the JSW Management Board, explains.

At present, the JSW Group employs 30,762 people, with 22,325 employed by Jastrzębska Spółka Węglowa SA alone.

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The Jastrzębska Spółka Węglowa Group is the largest producer of hard metallurgical coal and a significant producer of coke in the European Union. The Group operates on the basis of its two core lines of business: mining, consisting of the extraction of coal (mainly metallurgical coal), and coking, including the production of a full range of coke products. About 40 percent of the metallurgical coal produced by the Group in H1 2020 was processed by the Group’s coking plants into coke which, next to iron ore, is a key ingredient in the charge used in steel production in steel mills.