U.S. Markets open in 1 hr 21 mins
  • S&P Futures

    3,340.50
    -5.50 (-0.16%)
     
  • Dow Futures

    27,446.00
    -36.00 (-0.13%)
     
  • Nasdaq Futures

    11,350.50
    -44.25 (-0.39%)
     
  • Russell 2000 Futures

    1,504.70
    -1.80 (-0.12%)
     
  • Crude Oil

    40.31
    -0.29 (-0.71%)
     
  • Gold

    1,891.90
    +9.60 (+0.51%)
     
  • Silver

    24.08
    +0.48 (+2.02%)
     
  • EUR/USD

    1.1707
    +0.0038 (+0.3278%)
     
  • 10-Yr Bond

    0.6630
    0.0000 (0.00%)
     
  • Vix

    26.88
    +0.50 (+1.90%)
     
  • GBP/USD

    1.2864
    +0.0022 (+0.1724%)
     
  • BTC-USD

    10,773.35
    +70.85 (+0.66%)
     
  • CMC Crypto 200

    231.30
    +7.37 (+3.29%)
     
  • FTSE 100

    5,904.42
    -23.51 (-0.40%)
     
  • Nikkei 225

    23,539.10
    +27.48 (+0.12%)
     

Edited Transcript of KGH.WA earnings conference call or presentation 20-Aug-20 9:00am GMT

Half Year 2020 KGHM Polska Miedz SA Earnings Presentation

Lubin Aug 21, 2020 (Thomson StreetEvents) -- Edited Transcript of KGHM Polska Miedz SA earnings conference call or presentation Thursday, August 20, 2020 at 9:00:00am GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Katarzyna Kreczmanska-Gigol

KGHM Polska Miedz S.A. - VP of the Management Board (Finance) & CFO

* Marcin Chludzinski

KGHM Polska Miedz S.A. - President, CEO & President of the Management Board

* Pawel Gruza

KGHM Polska Miedz S.A. - VP of the Management Board (International Assets)

* Radoslaw Stach

KGHM Polska Miedz S.A. - VP of the Management Board (Production)

================================================================================

Presentation

--------------------------------------------------------------------------------

Unidentified Participant, [1]

--------------------------------------------------------------------------------

[Interpreted] Good morning, everyone. Welcome to KGHM Group conference where we will discuss the results of KGHM Group for the first 6 months of 2020. We have the management board of KGHM, and that's Mr. Marcin Chludzinski, the President of the Board; Mr. Pawel Gruza, Vice President for International Assets; Ms. Katarzyna Kreczmanska-Gigol, Vice President for Finance; and Mr. Radoslaw Stach, Vice President for Production. Vice President Adam Bugajczuk is not present today, but we will discuss investments and development as well. And as you know, for a couple of last months, we have been doing our conferences in a remote forum, but you can still ask your questions, sent them to er@kghm.com. After a short overview by the management board, we will take your questions, at least, parts of them. Responses to all the questions will be posted on our website and will be publicly available. I'll give the floor to Mr. President.

--------------------------------------------------------------------------------

Marcin Chludzinski, KGHM Polska Miedz S.A. - President, CEO & President of the Management Board [2]

--------------------------------------------------------------------------------

[Interpreted] Ladies and gentlemen, it goes without saying that we have just finished one of the most difficult periods in the last couple of decades, both in terms of Polish and global economy. In Germany, there have been talks about the recession of the century. The results have fallen to levels from before the euro. So since the introduction of the euro, we haven't had such a fast shrinkage of economic growth. So this time has been challenging and difficult. Meanwhile, when you look at the results that we want to present to you today, especially our EBITDA for the second quarter, we are approaching the levels for the first quarter in 2017 when copper prices were much higher than today. And the operating results at Sierra Gorda is the best operating results in the history of Sierra Gorda. When you look at our capitalization, as from July, we are picking up. We are returning to very high stock prices, the record prices at Warsaw Stock Exchange. And this is something that we owe to good management, good governance and involvement of our people.

On top of that, there is something less obvious. When you look at companies like ours and business in general at the time of COVID, you can't say that you just follow the plan and you do what you have planned for. It's not that easy. It's not that straightforward. The times are rather difficult. And let me share some personal thoughts about this. For me, these have been the most difficult moments for me in this company, the time that started in February and actually still continues. So the worst nightmare was a telephone from sanitary authorities asking us to shut down our production facilities. It's quite obvious what that would mean for us, for the Board, for shareholders, for people. That would be hundreds of millions, if not billions, of losses in revenues. But as you will see, when you look at our results, this -- none of this has happened. We avoided that risk and we have navigated safely through these difficult times, so far. We don't know what will happen next. We are still in the middle of a battle but it's worth telling you what we have done to avoid the rough ground, to avoid lockdown, to avoid a limitation of production, to avoid limitations of our sales market.

When we took our decisions in February, when the first symptoms of the approaching pandemics were already visible, we faced a dilemma. What should we do? Should we take some preemptive moves? Cut down production? Suspend certain types of production? Or perhaps, should we improve the safety of operations so as to maintain -- sustain our production levels?

This was not an obvious choice, but we chose option 2. Of course, it would be easier to cut down -- to reduce production rate. We chose the more difficult pathway with 30,000 people operating all over the world. We took that more difficult choice, and we implemented the procedures that we developed for that purpose. So we actually responded before lockdown was officially introduced in Poland. We also used some state-of-the-art technologies. We implemented safety measures, safety procedures, and thanks to strong involvement of our people, we have navigated safely through the most difficult months without really being affected by the COVID crisis.

The way we have been handling COVID has been appreciated, not only in Poland, but also abroad. Our competitors from all over the world asked us about how to proceed. We also implemented our Polish solutions in Sierra Gorda. As you probably know, Chile has a very high rates of COVID, but Sierra Gorda is working normally. And many other mining projects in Chile have been closed down because they were unable to ensure safety of their people. And the government took some decisions to shut down those operations. Sierra Gorda is still up and running, the procedures are in place, and this is well visible in our financial results.

So once again, we have over 30,000 people in the capital group in Poland and abroad, and they are still working despite the COVID. And this is far from obvious. Today, the situation may be calmer but we have to monitor it closely. It takes a lot of hard work, a lot of attention, and it also takes resilience and flexibility and quick responses to the changing situation. So the battle is still ongoing. And we, as the Board of Directors and our managers and our people, we are still fighting. And many other Polish companies from other industries closed down their divisions. They revised. In the mining industry in the world, there are very few companies that were able to deliver their 2020 plans.

For instance, Glencore, one of the leaders in the metals industry, reduced their production by 14%. Teck, the Canadian company, reduced their production in the second quarter by 23%. From among a group of 15 leading companies in the global mining industry, only 3 increased their production in this harsh COVID time. And we are one of those 3 companies, and we are very proud of that. So we didn't reduce our plans. We actually increased production. And we are one of the 3 global leaders who successfully increased production.

So everything we have achieved at a time when all economic experts speak about global recession, this is attributable not only to internal procedures and to adherence to those procedures, it's also attributable to a strategy that we implemented a few years ago. That was in December 2018. We were looking at the world, things like global trade wars. We adopted a strategy that helps us adapt quickly to macroeconomic changes in the world and to challenges such as COVID. That strategy helps us find a solid ground in a volatile situation. And these initiatives have proven very efficient in these difficult times.

In our international operations, whether in Canada or in Chile, we are changing our operating models. Many functions have been moved to Poland. We reduced employment in Canada. We will continue doing that in the future. This will help us reduce cost. We also reduced our office in Santiago in Chile. We also reduced some employment in Sierra Gorda. We delivered savings of tens of millions of dollars in Sierra Gorda alone, nearly $100 million savings that we owe to a unified logistics system in Poland with good financial savings and will -- these savings will be even greater in the future. The equipment that we use underground uses less energy, which translates into savings. So all these moves, all these measures are a manifestation of the strategy I mentioned. So as I said, our response to COVID is not only procedures. It's also strategy, both on the cost and expenses side.

This is -- the results are well visible in our EBITDA and net results of the parent company, also in the production results. We are quite proud that when others say, no, we cannot do that, the market is too difficult, we prove that it is still possible to

(technical difficulty)

about what's to come, what's happening in the global markets.

So despite the recession, our industry may be optimistic. In the first quarter of 2020, the deficit of supply of copper was 530,000 tonnes. In the second quarter, the Chinese imports increased in June and in July by 80%. I'm talking about copper imports. So 80% more than last year. So there's a lot of demand for copper and the data from the U.S. regarding construction permits talk about 1.5 million construction permits. This is a very good indicator in the context of the construction industry, which is indirectly related to demand for copper. So when you look at the short-term perspective and the long-term perspective, things like epidemics, reduced supply, but demand is still growing. So we are trying to stay optimistic. We are trying to respond to what the investment banks and analytical centers say, and they say that the supply -- the demand will be growing, and we are trying to prepare for that. We want to be ready for what's going to happen in global markets. We can successfully -- we have shown that we can successfully operate in challenging conditions in a manner that is satisfactory to both investors and employees.

We will continue our cost savings initiatives. We will sustain our investments, which is very important because we haven't scrapped any investments. We want to continue our investment plans, which is very important in the context of our development. I think time has come for me to give the floor to President Stach, who will tell us more about production results.

--------------------------------------------------------------------------------

Radoslaw Stach, KGHM Polska Miedz S.A. - VP of the Management Board (Production) [3]

--------------------------------------------------------------------------------

[Interpreted] Ladies and gentlemen, let me move on. As we have heard, the results are very good, given the context. We have delivered results that are very similar to last year results in terms of copper, and the results of moly and silver will be discussed later on by one of my colleagues.

Now the results in Poland. Extraction of copper, slightly lower than in 2019, and we want to extract less ore but produce more copper. And we have started this transition in 2019. So the further we go, the better the results will be. As far as [electronical] copper is concerned here, the results are slightly poor. That's because we had problems with third-party batches. But we are still within the budget that we assumed for 2020.

Silver production in Poland. The results delivered by KGHM in 2019 were record high. Obviously, our goal is to increase silver production. But everything depends on the amount of metal in the ore. Right now, this content is lower, so the results may be lower as well. But we are still working hard.

Our reserves or our inventories have reached the standard level for Legnica and Glogów smelting plants. So in the first quarter, it was 14,000 Cu in concentrates. In the second quarter, we had a slight increase, which is caused by a buildup of concentrate deposits, but by the end of the year, we should reach the standard levels as well. As regards anodic copper inventories -- copper anodes inventories, these levels are slightly higher than in 2019. That's because of the overhaul of Glogów I. And this means that we are following our plan for 2020.

Now I will pass over to my colleague, who will discuss the international results.

--------------------------------------------------------------------------------

Pawel Gruza, KGHM Polska Miedz S.A. - VP of the Management Board (International Assets) [4]

--------------------------------------------------------------------------------

[Interpreted] Good morning. Let me begin my presentation by repeating what the president has said. In our international assets, we have maintained continuity of production and satisfactory level of production with the efforts we have made to ensure safety in the times of epidemic at our plants. And we are shown as a model or an example of a perfect approach to managing this very difficult challenge. We have managed to achieve very good production results at Sierra Gorda, and that is in spite of the far-reaching OpEx and CapEx savings, which were introduced, also in terms of the number of jobs at that plant. All these measures which have been taken -- well, that was aimed at maintaining the production level or increasing it further. So you know the slides, so we've increased the results with higher throughput or higher copper grade or copper content, and that is why we have achieved such satisfactory results.

Now the production results of KGHMI. Well, last year, just to remind you, we put one of their mines to current maintenance, which was reflected in the results statistically. And there are also different factors affecting the results of various mines. So we have a transitional zone at Robinson. At Sudbury, we're managing the production in such a way that we're moving to areas where the content of precious metals is higher in order to benefit from the positive net prices, good prices. At Franke mine, the results were worse, indeed, because of the geological conditions, which were more difficult. That's all from me. Thank you.

--------------------------------------------------------------------------------

Katarzyna Kreczmanska-Gigol, KGHM Polska Miedz S.A. - VP of the Management Board (Finance) & CFO [5]

--------------------------------------------------------------------------------

[Interpreted] Ladies and gentlemen, let me briefly discuss the financial results. In revenues from contracts with customers are lower than over first quarter of last year by 2%. Given the external conditions we have seen in the first half of 2020, there is only a slight difference compared with last year. So most importantly, we have to see what actually cause the drop in revenues. These were lower copper prices. So it's PLN 732 million, with a minus, so that effect, and to some extent, it was set -- offset by the higher dollar exchange rate. So PLN 538 million, positive million, a positive figure. So -- well, that was only an impact on the Polish sectors. So the higher dollar exchange rate did not have a positive effect on our foreign operations or KGHMI because we don't have that natural hedging we have in Poland.

Now talking about our C1 unit cost. Well, we have to see that in our parent company and at Sierra Gorda, our C1 unit cost decreased by 12% at the parent company and by 14% at Sierra Gorda. We recorded a higher C1 cost at KGHMI due to no sales revenues, as explained by Mr. Gruza, and our lower price of copper. At the group level we reduced the C1 cost by 10%. And we have to say that the main reason behind the drop in that cost was a favorable dollar exchange rate and lower mining tax, the tax which was introduced last year. And this year, we see the results of that.

Talking about the EBITDA. Well, it's slightly lower compared with the first half of 2019. But this lower figure results from the lower EBITDA recorded in KGHMI, but in other sectors, was higher than last year. The net result is down by 28% but we have to see what actually contributed to the drop in our net profit.

So most importantly, we have to see that our revenues from copper sales dropped, and they were not fully offset by a higher silver and gold sales. And additionally, costs, by nature, dropped by PLN 344 million. So we have been very successful there given the conditions of our operations, and that's what we had influenced upon. And well, we have to see that the currency differences were favorable and the income tax was lower. That was also positive.

On the other hand, we could not compensate for the drop of revenues because of lower copper prices. Our net profit was also affected by the cash call. The cash call we made with respect to our foreign assets, and that was related to a lower copper price and a financial gap appeared, and we had to cover or bridge that financial gap. When you have a look at the graph showing cash flows, it's really characteristic of the first half of 2020, we had the epidemic outbreak. Initially, we had to learn how to operate, how to respond. We increase the level of cash at our disposal and there was a larger tranche of the loan. So as a result, cash at the end of 6 months was much higher than at the end of the year. But we took that precautionary measure because we did not know what would happen on the market. So we really wanted to ensure financial security, and that's why we chose to have higher cash. And the working capital change is important. So this is a result of the strategy we implemented last year. We continued implementing the strategy this year. And there is a positive effect of our net working capital cash that is PLN 342 million.

So as you can see, these external conditions have been difficult because of the relatively low copper price. We have actually not changed our debt level, so it increased by only PLN 85 million. And PLN 40 million of that was the -- due to exchange differences. So you could practically say that we have maintained a constant debt level or debt ratio. So the net debt-to-EBITDA ratio, our -- the main debt ratio we use compared with the first half of 2019, it dropped to 1.6 this year. Compared with the beginning of this year, it increased only slightly, but we're still at a level which is satisfactory in our company because it's below the level of 2. Thank you.

--------------------------------------------------------------------------------

Radoslaw Stach, KGHM Polska Miedz S.A. - VP of the Management Board (Production) [6]

--------------------------------------------------------------------------------

Now advancement of development initiatives. In the first half of 2020 is PLN 1.020 billion compared with 2019. You see the breakdown by the areas of operations, mining, smelting, other activities and also replacement, maintaining mine production and development. The selected development projects we're showing here relate to deposit access program. So that's the mining development to PLN 193 million and also the development Zelazny Most Tailings Storage Facility, where the completion of the level is 80%. And the [Pol-Siero] program -- environmental programs was PLN 55 million and also Retków–Scinawa and Glogów and [Puck] exploration projects, which are very important to us and also the new development programs. Importantly, under these difficult conditions, all of our development projects have continued with companies or contractors working here to the plan and budget. Thank you.

--------------------------------------------------------------------------------

Unidentified Participant, [7]

--------------------------------------------------------------------------------

Now we have discussed the main aspects. So that's been included in our full-year report, which is available. And now we will try to answer some of the questions. There have been many questions, and you can also send questions to our email, our Investor Relations email, and we'll try to answer them now.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Unidentified Participant, [1]

--------------------------------------------------------------------------------

And the first question is from Rafal Wiatr, Citi.

Do you think that the EBITDA reported by Sierra Gorda in quarter 2 2020 of PLN 344 million is repeatable? Do you think that this is a clear EBITDA without one-off -- special one-off events included?

--------------------------------------------------------------------------------

Pawel Gruza, KGHM Polska Miedz S.A. - VP of the Management Board (International Assets) [2]

--------------------------------------------------------------------------------

Well, thank you for that question. Generally, the savings program at Sierra Gorda is designed to actually use the turmoil on the market to actually adjust our contracts and cost base to make it optimal also for future reporting periods. So the financial result of Sierra Gorda makes us optimistic. And we hope that we can enjoy favorable cost positions in future periods.

--------------------------------------------------------------------------------

Unidentified Participant, [3]

--------------------------------------------------------------------------------

The question is about -- another question about Sierra Gorda from Rafal. It's about the copper sales volumes at Sierra Gorda in quarter 2. Do you think they are -- can be repeated?

--------------------------------------------------------------------------------

Pawel Gruza, KGHM Polska Miedz S.A. - VP of the Management Board (International Assets) [4]

--------------------------------------------------------------------------------

Well, the breakdown of the loads or the sales of Sierra Gorda is that these are large one-off volumes. So -- well, it's -- the repeatability varies through 1 period to the other. But generally, the production and sales results in the long run will synchronize and better production would translate into higher sales.

--------------------------------------------------------------------------------

Unidentified Participant, [5]

--------------------------------------------------------------------------------

And another question from Rafal.

So looking at this zloty to dollar exchange rate, we can expect this unfavorable balance in the third quarter or not?

--------------------------------------------------------------------------------

Marcin Chludzinski, KGHM Polska Miedz S.A. - President, CEO & President of the Management Board [6]

--------------------------------------------------------------------------------

Well, I think that -- well, this is more of a speculative question because, well, it's hard to speculate since exchange rates change overnight. It's hard to speculate. It's hard to predict.

--------------------------------------------------------------------------------

Unidentified Participant, [7]

--------------------------------------------------------------------------------

Michal Kuzawinski, JPMorgan. The budget for 2020, will it remain unchanged? Is it possible to go above the moly budget -- moly production budget for Sierra Gorda?

--------------------------------------------------------------------------------

Marcin Chludzinski, KGHM Polska Miedz S.A. - President, CEO & President of the Management Board [8]

--------------------------------------------------------------------------------

Well, we're now working according to the budget for 2020. We're trying to deliver the budget. And well, we've won the first half of the battle but it's still ongoing. And well, no, we have the second half of the match. And well, we'll inform you about the developments. Of course, we have the COVID situation. We're trying to deliver the budget, which was adopted before the outbreak of the epidemic, and Pawel will respond to the moly question.

--------------------------------------------------------------------------------

Pawel Gruza, KGHM Polska Miedz S.A. - VP of the Management Board (International Assets) [9]

--------------------------------------------------------------------------------

So lower moly production results from the lower moly content in the ore, but we're trying to improve our results by increasing the volume and the throughput of our systems. And we're also trying to achieve a higher moly recovery level, where we're recovering moly from the ore. So -- well, these figures have not compensated what we had compared with our results compared with what we had last year, but we hope that towards the end of the year, we will be able to improve that ratio.

--------------------------------------------------------------------------------

Unidentified Participant, [10]

--------------------------------------------------------------------------------

And the second question from Michal Kuzawinski is also about Sierra Gorda.

So what is the outstanding debt to be repaid at Sierra Gorda? And when can Sierra Gorda start repaying the loan from KGHMI?

--------------------------------------------------------------------------------

Pawel Gruza, KGHM Polska Miedz S.A. - VP of the Management Board (International Assets) [11]

--------------------------------------------------------------------------------

Thank you for that question. Let me remind you that all the debt of fund financing of Sierra Gorda will practically end this year. The last big tranche of more than $1.5 billion, repayable this year to 100% of the shares, and the residual amount will be repayable next year. But the plan or the financial strategy proposed by KGHM was to ensure that 2020 will be the first year in which Sierra Gorda will not need to be supported financially by the headquarters in this joint project with the Japanese partner. So it was to be the first year without financial support from Poland. But because of the situation on the markets and with the approach of our partners in Sierra Gorda project, we had to support Sierra Gorda financially. And as our CFO has mentioned, it has had an impact on the financial results in the first year. But with a very good financial situation, Sierra Gorda is able to refinance that old debt. I'm talking about the project finance here. So I hope that for the future, for the next year, when we work on the budget, we will achieve a situation where we will not have to support the project financially and maybe the cash will flow in the other direction.

--------------------------------------------------------------------------------

Marcin Chludzinski, KGHM Polska Miedz S.A. - President, CEO & President of the Management Board [12]

--------------------------------------------------------------------------------

Just to add on that -- well, sierra Gorda is able to obtain external funding on the larger scale, and it actually testifies to the financial situation there. So it has been accomplished partly but with the uncertainties of the first and second quarter, financial institutions were not sure. And it was difficult to predict the situation on the metal -- on the commodities and metals markets. Now the situation has changed. And so these transfers in 2019, and 2020 are really minimal compared with funds, which used to be transferred to Sierra Gorda to fill in the financial gap in the past. So hopefully, we'll reach consensus with our partner on that project. It's much better for us if the company, Sierra Gorda, actually uses external funding, and it is more and more able to do so.

--------------------------------------------------------------------------------

Unidentified Participant, [13]

--------------------------------------------------------------------------------

Next question from Mr. [Mariusz Marcinkowski, Business Alert].

A question about the high growth of operating results of Sierra Gorda, a growth by nearly 150%.

--------------------------------------------------------------------------------

Pawel Gruza, KGHM Polska Miedz S.A. - VP of the Management Board (International Assets) [14]

--------------------------------------------------------------------------------

As we have explained, there are 2 factors here. So greater throughput, which translates into greater production and better copper content in the ore. When you combine these 2 factors, the result is quite obvious. The price formulas that we use in selling the concentrate from Sierra Gorda also give us some positive effects when you compare against the average LME price. So we are quite optimistic about the months to come.

--------------------------------------------------------------------------------

Marcin Chludzinski, KGHM Polska Miedz S.A. - President, CEO & President of the Management Board [15]

--------------------------------------------------------------------------------

Let me add that this is not a surprise. This is good news, obviously, but it's not a surprise. We, as the management board, with Pawel Gruza and the General Manager in Chile, we follow certain plan. And when you look back at the last 2 years, our operating results have been improved each year. Of course, we had some poor months especially in the context of the shutdown. This is not a one-off situation. This is something we have been consistently doing for 2 or even 3 years, and we see the results in every single year, and we combine that with some other initiatives that save money. So this reasonable sales policy gives the ultimate outcome that Pawel has just discussed.

--------------------------------------------------------------------------------

Unidentified Participant, [16]

--------------------------------------------------------------------------------

Next question, [Jakub Kaimovich] (inaudible) 24.

How has the COVID affected the global copper market?

--------------------------------------------------------------------------------

Marcin Chludzinski, KGHM Polska Miedz S.A. - President, CEO & President of the Management Board [17]

--------------------------------------------------------------------------------

In the first period, so in the first quarter and the second quarter, we had some shaky prices. The prices fell. There was a lot of uncertainty in the market. People didn't know what's going to happen. But now we can see that in the third quarter, the prices have picked up, they haven't reached the pre-COVID levels yet. But they have improved both for copper and for silver, and there are 2 factors that we identify as the key drivers. So first of all, the situation in China has improved. There is more optimism, even conservative banks have revised their forecast for China, and they say that in the third quarter -- excuse me, in 2020, China can grow by 2.5%. So that's one thing. The other thing is the relative peace in trade wars. I say relative peace because things keep happening. There are new developments. There are talks. There are -- there is some tension between China and the U.S., but we can sense some positive signals from the U.S. economy, especially in the construction industry. As a result, there is some positive sentiment on the supply side. And the pandemic has reduced production capabilities of many companies. So as I explained before, we try to be optimistic in the short term. And in the longer term, of course, we would like copper prices to go up. It's possible. It's not certain. And also, we are far from saying that things have stabilized. No, they haven't. We are still in the middle of the COVID crisis. And experts and investment banks and analytical centers keep saying the same thing, that there is still a lot of uncertainty out there.

--------------------------------------------------------------------------------

Unidentified Participant, [18]

--------------------------------------------------------------------------------

When I look through the questions. I can see that there is nothing else to add, actually. Some questions from different contributors are actually identical to those we already answered. But as we have said, all the answers will be posted on our website in a few days. Let me just add something to the question from Mr. [Erafoviak], who asked about the loss of JV in PLN, it was PLN 210 million, whereas in Sierra Gorda results, that was PLN 82 million. In the meantime, I digged deeper into the details. So maybe any one of you would like to take that? The results on joint venture includes the consolidated net results of Sierra Gorda according to the property rights method and taking into account the interest on loans. And we mentioned that those 2 factors significantly affect the consolidated results. The consolidated greater loss of Sierra Gorda that results from the greater financial support, $52 million offered by KGHM in the second quarter, so offered by the owners. So the participation in the JV losses in the reporting period, while we increased the capital and in accordance with the property rights formula, we had to reduce that share by the loss generated by Sierra Gorda, up to the level of the increased capital. So that's a highly technical answer for me.

--------------------------------------------------------------------------------

Unidentified Participant, [19]

--------------------------------------------------------------------------------

So we have reached the end of this conference. Thank you very much, directors. We are still for you. The communication department, the IR department is for you. Thank you very much.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]