In the interest of ensuring a reliable flow of information to all JSW stakeholders, especially to employees and their families, we would like to clarify that the Company's current financial position is due to extremely difficult market conditions. Like many mining companies in Europe, we face declining margins and rising costs. Average coking coal prices have fallen from more than USD 360 in 2022 to less than USD 200 per ton in 2025, which, combined with the current downward trend in foreign exchange rates, as well as nearly 60% increase in employee benefits in 2021-2023, negatively affects the Company's financial performance.
Therefore, we act responsibly and strive to minimize the risks, with limited impact on working conditions. We report on all actions taken not only in stock exchange reports, to which we are obliged by law, but primarily through constant communication with employees, and secondarily through the media.
We operate in a continuous decision-making mode - immediately after diagnosing problems, we implement corrective actions. Since November we have been implementing the Strategic Transformation Plan which includes, among other elements, cutting costs and rationalizing purchases. At the same time, we have maintained key investments in infrastructure modernization and occupational safety. Despite financial difficulties, we have not cut spending on occupational health and safety. We are in talks with banks to secure the Company's liquidity for the next quarters. Thanks to the dedication of the entire staff, coal production and sales have been growing regularly from quarter to quarter this year, exceeding plans. Despite the tangible effects of the initiatives undertaken, given the deteriorating market situation, the cost-cutting measures taken so far may not be enough.
We would like to emphasize that employees are the foundation of our business. Any decisions on labor costs will be possible after a broad social dialogue. The information presented in the trade union's letters regarding measures aimed at employees, today represent options analyzed at the level of liquidity risk management and do not have the character of decisions ready for implementation. The Company's management board will keep all employees informed of any decisions.
We would like to remind you that we are invariably open to dialogue and invite trade union organizations to substantive and constructive talks. We believe that face-to-face meetings, based on sound financial data and the Company's real capabilities, are the best way to find solutions together. We are committed to a calm and substantive atmosphere for talks that foster mutual understanding and build consensus for the safety of employees and the future of the Company.
Respectfully,
JSW S.A. Management Board
