Kghm Polska Miedz Sa Ord

Good day, everyone.

Welcome at the conference where we will discuss the results for the first six months of 2023 at KGHM. And today we have Mr. Tomasz Dzikot, the CEO, Mateusz Wodejko, Vice President for Finance, Marek Swider, Vice President for Production, Miroslav Kidon, Vice President for Foreign Assets, who is also the Acting Vice President for Development, and Mr. Marek Pietrzak, Vice President for Corporate Affairs at KGHM. As always, we have Janusz Krystosiak, head of investor relations, and he will handle the Q&A session at the end of the presentation. We will answer questions from the journalists present here and those submitted by email. This conference is also available online, and questions to the board can be submitted by email. And all the answers will be posted at the company's website in the Investors Kit. And my name is Piotr Śliwiński, and I'm the head of the Corporate Communication Department, and it is my pleasure to be the host of this meeting. Now I will give the floor to Mr. Tomasz Žižko.

Thank you very much. Ladies and gentlemen, welcome at the results conference at our head office in Lubin. Today we'll share with you the results achieved in the first half of 2023. As you know, KGHM is one of the largest Polish companies and also a very global Polish enterprise. Therefore, We are impacted by external environments, macroeconomic, not only local at Polish level, but also global factors. On the one side, it could be the price of basic raw materials, price pressures. economic situation in countries that drive demand. We are one of the largest suppliers of copper, and all these factors influence the results of the Capital Group, KGHM Capital Group, that we'll share with you today. Starting the presentation, ladies and gentlemen, as I said, the macroeconomic environment is noteworthy for a number of elements. The price of copper. The price of copper, which compared to the previous period, significantly came down. The average price is at $8,700 per ton. was 8% lower than in the same period last year. The same applies to the price of copper in Polish Zloty. This is a significant decrease of the price of this raw material that influences our raw material. In terms of the price of silver, it is similar to The same year – same period last year, the same in terms of exchange rate. Molybdenum price went up. However, the volume of production of molybdenum is such that that increase doesn't influence the results of the capital group. The price of copper influences the results of the capital growth, but why the price is as it is? First of all, The expectations were not confirmed related to a strong increase of the Chinese economy after the COVID pandemic. China is one of the largest markets. On the right-hand side, we can see that levels of stock in the Shanghai exchange after an increase went down. significantly. This was influenced by UN's exchange rate to the American dollar, which is – which came down. Also, the use of own existing stock and also forecasts that fail to fulfill in terms of the construction industry. The demand is driven by energy projects, but the market expected a strong bounce in the economy after the COVID. This didn't happen, and this drives their price of copper. Right now, the price of copper is significantly lower than last year, and at present it's within the range of $8,200 per ton. The price of – in Polish zloty is a bit higher, and that also influences our results. In terms of the macroeconomic environment. It is driven by different countries, especially by countries that drive demand for our products. In Poland, we can enjoy positive economic growth. These are forecasts of the International Monitor Fund from July, comparable to the previous forecasts. But in general, a downturn of the economy in Chile, not very optimistic forecasts in terms of other economies, the eurozone under 0.1 percentage point. So that drives the demand for our product. And that's why the price is – the price of copper is 11 percent lower than in the first half of last year. In terms of our results, I showed you the price of copper, lower by 11 percent. U.S. dollar to the public slot exchange rate is comparable. We're happy in terms of the production performance and actually all of the performance delivered by Polska Miecz. Our performance allows us to mitigate cost pressure risks. related to the fluctuations in the energy market and the steel market. So the results of KGHM are excellent, historically highest, one of the highest. So I would like to extend my thanks to all our employees, our people working for us. their work significantly contributes to our performance. We are determined to continue our investment program. We are really happy that CapEx performance is 21% higher than the same period of last year, revenue down by 1% that's comparable Given the difficult macroeconomic environment, we take pride in keeping a very safe level of debt to EBITDA under one, and my colleagues will elaborate on these details. In terms of the key and principal results, the Capital Group Over $17 billion in revenue, $15 billion by Polska Miecz. EBITDA, over $3 billion, one of the highest, historically higher, and Polska Miecz, over $2 billion contribution. the results are really significant highs in this six-year. My colleagues will elaborate on that. All this we owe to excellent production performance and reduction in cost pressures. This picture gives you more details EBITDA at over 3 billion. This is the third-highest result. The 2020-21 in the first six months was known for very high copper prices and a strong American dollar that influenced the results of the capital group. But the results, 3.148 billion is typical for our companies. Net results fits the long-term trend. and the level of debt is safe. Production of silver and copper, historically at very robust levels, these are one of the most important factors that allow us to mitigate any risks related to the existing prevailing cost pressures. In terms of development, just by way of introduction, and Mr. Keidon will elaborate more on this, historically, we can enjoy the highest level of investments, 25 billion, these are the assumptions, and the performance in the first six months, 1.369 billion. That's 21% higher than last year. We presented the results, the GG1 shaft, which was connected and made June with our mine. We presented that there on site. We commissioned the Solinox line in our copper plant. We've started a lot of investments, and we're preparing a salt production GG2 shaft where work is underway. But Mr. Kidon will tell us more.