UPDATE 1-Polish KGHM flags more than $1 bln in writedowns in 2015

Mon Feb 8, 2016 1:08pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* KGHM recognises $494 mln loss after impairment tests

* Group also books $510 mln loss on key Sierra Gorda asset

* One-off losses stem from commodity price slump

* KGHM maintains dividend policy despite losses (Adds more detail, company comments)

WARSAW, Feb 8 (Reuters) - Poland's KGHM, Europe's second-biggest copper producer, on Monday flagged a record $1 billion in writedowns on key foreign assets, including the Sierra Gorda mine in Chile, due to plunging metals prices.

The state-controlled group said the writedowns will not impact its dividends and credit covenants, adding that it has begun revising its 2015-2020 strategy to significantly reduce capital needs in the short and medium term.

The move is the latest in a series of writedowns on resource assets and downgrades of earnings forecasts by miners in the face of a global commodity slump.

KGHM, which closed the first three quarters of the year with a consolidated net profit of 1.2 billion zlotys ($301.6 million), recognised a $494 million loss following impairment tests on its assets in Chile, the United States, and Canada.

It also announced a $510 million loss on its investment in the Sierra Gorda SCM firm that owns the Sierra Gorda mine - KGHM's largest foreign asset - bringing the group's total impairments for the year to just over $1 billion.   Continued...