UPDATE 1-Poland's KGHM expects higher profit, surpassing output goals

Thu Aug 14, 2014 8:38am EDT
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By Adrian Krajewski

WARSAW Aug 14 (Reuters) - Poland's KGHM, Europe's second-biggest copper producer, expects to exceed its output targets for this year and beat analysts' forecast for its full year earnings thanks to higher global demand for the metal, the Polish group said.

The state-controlled miner did not provide its own guidance for 2014, but has previously said it would come close to analysts' forecasts for its full year net profit of 2.26 billion zlotys ($724 million).

"Our results in the first half of the year exceeded our expectations slightly," KGHM deputy head Jaroslaw Romanowski told a news conference.

"I had said earlier that the market consensus for our net income could be seen as a good benchmark. I think that at the end of the year we will be able to pleasantly surprise in this regard," he added.

According to KGHM, the world's largest silver producer, lower metals prices have reduced its earnings in the first half of the year by 905 million zlotys to 1.12 billion zlotys, or around half of what analyst estimate for the full year.

Copper prices averaged $6,916 a tonne in the first half of 2014, below the miner's full-year goal of $7,100. KGHM has, however, got halfway towards its copper output target of 567,500 tonnes for this year.

It now expects to exceed the copper output goal by 4,000-5,000 tonnes, planning also to produce 55 tonnes more silver this year that the targeted 1,140 tonnes.   Continued...