KGHM announced that it plans to increase the production of rhenium from 1.5 tons this year to 5.0 tons in 2007, strengthening its position on the metal’s market. Please note that the global output of the metal amounts to only 70 tons annually. KGHM net earnings from rhenium sales are forecasted at PLN 7.4m on the revenues of PLN 53m in 2006.
Our view: We view the news as slightly positive. Nevertheless, the Rhenium sales would be a minor fraction of company revenues. We reiterate our Hold rating for the stock.