New World Resources Magazine
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New World Resources magazine No. 4 2012 interview 6–9 Gareth Penny: Keeping with Carbon technology 14 –17 Logistics system deployed at OKD undergoes dynamic transformation responsibility 20 –21 People key to NWR’s sustainable development Editorial Dear Readers, The OKD Foundation will celebrate its fifth birthday at the beginning of 2013. Just like a child that reaches this age, our Foundation is clearly growing up, with projects that are increasingly sophisticated. And if we were describing a child, we’d say that he or she is becoming smarter and cleverer! This year saw the creation of new grant-giving programmes. They are more targeted than in previous years and their focus has had a demonstrably positive impact on the quality of life for those to whom our support is directed. The Living Housing Estates initiative has had an excellent start, improving the lives of people living on several housing estates throughout the Czech Republic thanks to a grant from the Foundation and the efforts of local residents. The project’s success was acknowledged when it won the Company and City category of the TOP Responsible Company 2012 Awards. What’s more, the campaign that marked the project launch also won an award, with its success coming in the social, environmental and cultural marketing category of the prestigious Effie Awards, which recognise effective advertising. Non-profit organisations in which Group employees actively participate can take advantage of our new “Srdcovka” [Cockles of the Heart] programme. The programme enables the best non-profit organisations to further develop and offer attractive activities for which they would otherwise lack the required funding. We are good at rewarding those whose projects, often conducted with OKD Foundation support, bring benefits, joy and a better life to those around them. I am therefore grateful that at the end of November we had the opportunity to express our admiration and respect for these people and organisations at the fourth annual OKD Foundation Awards. They fully deserved their recognition. I am strongly convinced that they will persevere in their efforts to benefit others. When OKD established its foundation, it pledged to commit 1% of its gross profit every year to the OKD Foundation, in good times and bad times alike. This commitment, amounting so far to CZK 240 million, has helped the OKD Foundation to support more than 1,400 projects organised by non-profit organisations and municipalities. In the process, the Foundation has become an institution that is well respected within the non-profit sector of the Czech Republic. Everyone who has contributed through the foundation deserves a big thank you. And all contributors can be certain that the people who need help appreciate their support and our efforts many times over. The combination of all those efforts helped us to take second place in the TOP Responsible Corporation 2012 competition organised by Byznys pro společnost [Business for Society]. We see this recognition as placing an obligation on us to pursue excellence in our future work, and as confirmation that we are on the right path, striving for a responsible approach to business as an integral part of our corporate strategy. Petra Mašínová, NWR Head of Corporate Communications and Sustainability Open Mine No. 4 I 2012 Published by: New World Resources Plc c / o Hackwood Secretaries Limited | One Silk Street | London EC2Y 8HQ | United Kingdom Jachthavenweg 109h | 1081 KM | Amsterdam | Netherlands Tel.: +31 20 570 2200 | Fax: +31 20 570 2222 E-mail: [email protected] Web: newworldresources.eu Editor-in-Chief: Tomáš Píša | Editor: Marek Síbrt | Cooperation: Roman Grametbauer Production and distribution: BISON & ROSE Design and typeset: BISON & ROSE Registration: MK ČR E 18829 Submission deadline: 22. 11. 2012 With a QR code reader All rights reserved. The reproduction and use of all images contained within on your mobile phone, this publication without the written approval of NWR is forbidden. The logos you do not have to retype of companies, products and services introduced in this publication are a web address. Just scan the business trademarks of the respective firms. Questions, remarks and article the code on the left into ideas can be sent to: [email protected]. An electronic version of the magazine your phone. including active links is accessible on the Company website. 6–9 Gareth Penny has kept with carbon throughout his professional career 10 –11 14 –17 Industry drives Efficient the Central logistics European in a mine economies are a must 18 –19 22 –23 The sleeping The OKD giant of Foundation coking coal is brightening grey housing estates Content 4–5 economy 18–19 economy NWR’s 2012 nine month results Mongolia: the sleeping giant 6–9 interview of coking coal supply Gareth Penny: Keeping with carbon 20–21 responsibility 10–11 economy People are key to sustainable Industry is the driving force behind development at NWR Central European economies 22 responsibility 12–13 technology No one is obliged to be a good OKD is an important customer neighbour of Caterpillar 14–17 technology 23 responsibility Logistics system deployed at OKD Housing estates come alive undergoes dynamic transformation thanks to OKD Foundation economy interview technology NWR’s 2012 nine month results In November NWR announced its results for the first nine months of 2012. Trading conditions continued to be difficult in the third quarter, as demand for steel products has deteriorated, particularly in the car industry in Western Europe. This has forced some steel mills and foundries in our core markets to continue operating at reduced levels. However, against this backdrop we achieved results that were ahead of market expectations. A key operational highlight was our tight cost control during the period – a theme that will be of high priority for the company in 2013. performance during the period and a series of efficiency measures for our Lost Time Injury Frequency Rate 2013 to ensure we are well positioned now stands at 7.48 lost-time injuries for the future. per million hours worked. We remain committed to reaching our target of Our balance sheet remains strong. At a LTIFR of less than five by 2015. the end of September, our net debt stood at EUR 481 million including Fourth quarter pricing EUR 444 million of cash and cash In our October trading update, we equivalents announced our agreed prices for coking coal and coke for the final Development projects quarter of 2012. The ongoing weakness Our review of the Debiensko project in in the steel industry is having a knock- Southern Poland is underway and once on effect on coking coal and coke it has been completed the Board will prices, which remain on a downward NWR operates in a region with the trend. Coking coal prices decreased highest proportion of industrial by 20% quarter-on-quarter to settle employment in Europe and the highest at an average agreed price of EUR 102 9M 2012 Highlights: car production per capita globally. per tonne (down almost 40% year-on- year), and our average coke price was Revenues Results highlights agreed at EUR 264 per tonne, down 8% of EUR 1,013 million Revenues were over EUR 1bn, down on the third quarter. EUR 228m mainly due to lower coking Mining unit costs of EUR 79/t coal prices that were down 30 per Finally, our thermal coal prices are EBITDA of EUR 227 million cent year-on-year; and EBITDA was locked-in for 2012 at an average EUR 227m, down EUR 142m. We made blended price of EUR 74 per tonne. Earnings per A share a net profit for the period of EUR 47m, of EUR 0.17 which translated to earnings per Cost control share of EUR 0.17. Coal production was NWR remained focused on tight cost Coal production of 8.6Mt, 8.6Mt with external sales of 7.2Mt, control during the period and as and external sales of 7. 2 Mt and the proportion of coking coal in a result our mining unit costs remained the external sales mix accounted for flat in CZK terms for the first nine Coke production of around 53 per cent. Coke production months of the year. This focus on cost 525kt, and external was 525kt with external sales of 432kt. containment and prudent capital sales of 432kt management will continue for the We achieved a further 6 per remainder of this year and into next LTIFR at 7.48 cent improvement in our safety year and we are currently finalising Open Mine 4 I 2012 4 safety reclamations responsibility Ján Fabián appointed Chief Executive Officer of OKD make a decision about the future of the project early next year. Meanwhile, our expansion project for the Karvina Mine in the Czech Republic to unlock 30Mt of hard coking coal reserves from the existing footprint by 2017 is progressing to schedule. Although we are going through difficult times, NWR remains confident in the resilience of its business, which is underpinned by long-standing NWR has announced that Ján including customers, employees, customer relationships, in a region Fabián is to become Chief Executive our community and our with the highest proportion of Officer and Chairman of the Board shareholders. I am also delighted industrial employment in Europe and of its Czech coal subsidiary OKD, a.s. that Klaus will continue to make the highest car production per capita on 1 January 2013, succeeding Klaus a contribution to NWR in his new globally. Dieter-Beck, who will retire as CEO role as a Non-Executive Director after serving since 2007. Mr. Fabián, and ensure a smooth transition of Market feedback who is currently Chief Operating responsibilities,” said Gareth Penny, The main positive for analysts was the Officer of OKD, will also join the Executive Chairman of NWR.