(106 PLN, 3,72%) increased its management earnings guidance for 2007 to PLN 3.68 bn from PLN 2.98 bn, on revenues of PLN 11.8bn, from PLN 10.6bn before, on the back higher estimate for average copper price, at USD/t 6,950 versus USD/t 5,700 before. The management guided for lower copper production volume, down by 1.2% to 531.5 thousand tons, due to abandoning work in mines on Sundays, in line with earlier indications. Unit production cost is expected 9% higher at PLN/t 10,320 (USD/t 3,686), on the back of higher variable costs related to increased copper price forecast.
Our view: We view the news as neutral. new guidance still seems conservative, assuming flat copper price performance for 2H07 and we view the chances of the company beating its new guidance as high. Our own forecast for 2007 calls for net earnings of PLN 4.0 bn on the revenues of PLN 13.7bn, on the assumption of average copper price of USD 7,280/tonne (cash) in 2007.