NWR - Unaudited 9M 2014 Results

9M 2014 Financial summary

• Revenues from continuing operations of EUR 504 million, down 21%.
• Coking coal average realised price of EUR 86/t, down 12%; Thermal coal average realised price of EUR 56/t, flat year on year.
• Cash mining unit costs of EUR 68/t, down 16% (10% on a constant currency basis) on 2% lower production.
• Selling and administrative expenses from continuing operations down 26% to EUR 100 million.
• Positive EBITDA from continuing operations of EUR 4 million, up EUR 54 million from the comparative period.
• Basic loss from continuing operations per A share of EUR (0.16).
• Net debt of EUR 734 million, including cash of EUR 77 million as of 30 September 2014.
• Pro forma Net debt of EUR 202 million, including cash of EUR 151 million as if restructuring was completed as of 30 September 2014 (actually completed on 7 October 2014).
• As at 30 September 2014, EUR 28 million of approximately EUR 42 million of associated costs have been incurred in relation to the restructuring process.
• Balance sheet restructuring completed on 7 October 2014.

9M 2014 Operational summary

• Safety metrics LTIFR of 7.19 in 9M 2014, vs. 7.41 in FY 2013.
• Coal production of 6.3Mt, down 2% and coal sales of 6.1Mt, down 15%.
• Coal sales mix of 60% coking coal and 40% thermal coal.
• CAPEX of EUR 45 million, down 56%.
• Coal Inventory of 612kt, up 9% year on year.
• Total headcount from continuing operations including contractors down 8%.
• Start of a strategic review of the Debiensko development project.
• Ian Ashby and Colin Keogh joined the board of NWR as independent directors.
• Steven Schuit, Paul Everard and Hans-Jörg Rudloff retired from the Board. .

Management expectations

FY 2014 Prices and targets

• Coking coal Q4 2014 average price agreed at EUR 85/t, up 4% on previous quarter.
• An average price of EUR 54/t has been agreed for thermal coal production in 2014.
• Production and sales volume targets of 8.75 - 9.0Mt.
• Target of 55% - 60% coking coal in the sales mix.
• CAPEX below EUR 90 million.
• Further improvement in LTIFR towards the 2015 target of below 5.
• Cash mining unit costs in the mid EUR 60's excluding the Paskov Mine.

2015 price expectation and targets (further targets shall be provided in February 2015)

• No significant price movements in either coking or thermal coal expected.
• Coal production target of 7.5 - 8.0Mt

Results of the Balance Sheet Restructuring
Substantial balance sheet strengthening achieved with net debt reduction from prior to the completion of the restructuring EUR 734 million to EUR 202 million upon completion. The main characteristics of the restructuring were:

• EUR 150 million of new equity capital has been raised.
• A new EUR 35 million super senior credit facility has been provided by existing noteholders.
• EUR 300 million Senior Secured Notes due 2020, EUR 150 million Mandatory Convertible Notes due 2020, and EUR 35 million Contingent Value Rights have replaced EUR 500 million Senior Secured Notes due 2018 and EUR 275 million existing Senior Unsecured Notes due 2021.

More info at NWR website