KGHM results suffer due to Telefonia Lokalna losses

KGHM Polska Miedz has unveiled a short-term strategy aimed at putting its ailing core business back on its feet. The announcement follows the publication of the company's financial results for 2001, which show a loss of zl.190 million, compared to a net profit of zl.618 million in 2000. CFO Andrzej Szczepek blamed the poor performance on external factors, chiefly the 13% fall in copper and silver prices. KGHM, which is the world's sixth largest copper producer, said that in order to improve the situation it planned to reduce production costs, curb investment and restructure its heavy debt. The company warns, however, that the consolidated results of the whole capital group are likely to be much worse, since KGHM's fixed line telephone unit Telefonia Lokalna is estimated to have lost zl.392 million in 2001. KGHM president Stanislaw Speczik promised an improved performance by the independent telephone operator this year, predicting its losses would be reduced to zl.143.9 million. (Prawo i Gospodarka, p. 7; Rzeczpospolita, p. B3; Reuters) P.J.