KGHM deputy CEO Mr. Bylicki said that the company would increase its official profit forecast, due to stronger than expected copper prices, around the date of publication of its 2Q07 financial results in August. Currently the management expects PLN 3.0 bn net earnings in 2007, assuming average copper price of USD
5700 per ton for 2007, while the current price stands at 7300.
Our view: We would expect a positive impact of the news. Assuming that the strong copper prices persist until August, we would expect a fairly aggressive increase in company official profit guidance, corresponding to KGHM
’s already optimistic medium term copper price scenario, its improved hedging policy and continued promises for capping production costs. For the time being, we keep unchanged our own forecast for PLN 3.1bn profit, on the assumption or average copper price of USD
/t 6200 for 2007.