NWR - Unaudited FY 2013 results

Financial summary

§ Revenues from continuing operations of EUR 850 million, down 28% on falling coal prices.

§ Coking coal average price of EUR 98/t, down 22%; Thermal coal average price of EUR 56/t, down 24%.

§ Cash mining unit costs of EUR 78/t, up 10% on a 21% decline in production, down 14% on a stable production basis. Q4 2013 cash mining unit costs at EUR 68/t.

§ Selling and administrative expenses from continuing operations down 26% to EUR 165 million.

§ EBITDA from continuing operations of EUR (10) million. EUR 40 million EBITDA in Q4 2013 was positively impacted by the release of EUR 28 million provision for employee benefits.

§ Impairment charges of EUR 807 million recognised on continuing operations.

§ Loss from discontinued operations of EUR 56 million, including loss on disposal of EUR 65 million.

§ Basic loss per A share of EUR (3.62).

§ Underlying basic loss from continuing operations per A share of EUR (0.86).

§ Year-end net debt of EUR 625 million, including cash of EUR 184 million.

§ Going concern basis of accounting applied in the expectation that capital restructuring (see below) will be successful; auditor's report likely to refer to the directors' description of the material uncertainty relating to the use of the going concern basis.

Operational summary

§ LTIFR of 7.41, improvement of 3%. Regrettably, 2 miners lost their lives. Drive for fatality-free operations continues.

§ Coal production of 8.8Mt, and coal sales of 9.7Mt.

§ Coal sales mix of 48% coking and 52% thermal coal.

§ CAPEX of EUR 100 million for continuing operations, down 55%.

§ Inventories down 70% to 380kt.

§ Total headcount including contractors down 7%.

Update on liquidity and business optimisation steps

§ Targeted EUR 100 million of cash-enhancing measures delivered in full by YE 2013.

§ Sale of OKK for gross proceeds of EUR 95 million completed, EUR 7 million receipt deferred until March 2014.

§ Waivers and amendments in relation to ECA facility agreed.

§ Collective agreement with trade unions for 2014 - 2018 signed.

§ Non-binding Memorandum of Understanding on the closure of the Paskov mine signed with the Czech government.

FY 2014 Prices and targets

§ Coking coal Q1 2014 average price agreed at EUR 91/t, down 7% on previous quarter.

§ Thermal coal FY 2014 average price for 80% of expected production locked in at EUR 54/t, down 4% on FY 2013.

§ Production and sales volume target of 9 - 9.5Mt.

§ Target of 55% - 60% coking coal in sales mix.

§ Maintenance CAPEX below EUR 100 million.

§ Further improvement in LTIFR towards the 2015 target of below 5.

§ Cash mining unit costs decreasing to the EUR 60/t run-rate by year-end, subject to Paskov's closure.

Review of NWR's capital structure

§ The Board initiated a review of NWR's capital structure on 22 January 2014.

§ The Company has commenced discussions with all of its stakeholders with a view to developing and implementing a capital structure that recognizes and respects the interests of all stakeholders.

§ Discussions include the Company's majority shareholder, BXR, who has indicated that it and its shareholders are prepared to invest new equity capital into a revised and satisfactory capital structure.

§ The Company has also commenced discussions to advisers to the Ad hoc committee of note holders, who represent holders of both the senior secured notes due 2018, senior unsecured notes due 2021 and cross-holders.

Update on review of NWR's mineral reserves and resources

§ For the Czech assets, JT Boyd has reported on a preliminary basis a total of 64 million tonnes of JORC compliant saleable (proven and probable) reserves as at 31 December 2013, down 65% from the JORC saleable reserves as at 31 December 2012 of 184 million tonnes.

§ For the Debiensko project in Poland, for which IMC is currently preparing a revised mineral resources and reserves report, it is probable that the previously reported reserves for Debiensko will be downgraded to resources.

Chairman's statement

Market conditions have remained challenging during the fourth quarter of last year, which was marked by a further 15 per cent decline in global coking coal spot prices. This has inevitably impacted the pricing for our coking coal in the first quarter of this year, down another 7 per cent on the previous quarter.

Throughout 2013 and into 2014 NWR's management has delivered on the initiatives that we launched last spring and has consistently executed our cost containment programme. As a result, our cash mining unit costs amounted to EUR 68/t in Q4 2013, administrative expenses decreased significantly year-on-year and EUR 100 million of cash-enhancing measures were realised (see table on webiste).

More information at NWR Website