KGHM revises its old contracts and profit forecast

"If the price of copper remains at current levels, raising our projections will be unavoidable," said Maksymilian Bylicki, deputy president of KGHM. The company is closing old contracts for permanent purchase of copper at lower prices, which is hindering the chances of forecasting its actual results. "In such a situation our earnings forecast is positively correlated with the forecast of copper prices. I believe that the growth trend will not be kept," said Andrzej Powierza, analyst with BDM PKO BP. The company's enormous profits will be re-invested mostly in domestic mines, as well as in modernization enabling cost-cutting. "We have a plan of lowering the cost of production per ton by as much as $100, which will substantially improve our profitability," said Bylicki. In 2006 KGHM's margin stood at 30%. (Parkiet, pp. 1, 3) M.M.