Profil:
Jastrzębska Spółka Węglowa SAJSW coal expects first effects of transformation in 2025
Listed coking coal group JSW expects the first results of the prepared transformation plan in 2025, the company representatives announced at a press conference. The plan does not address the issue of employee costs, but JSW's management is in talks with the social side on sorting out remuneration rules.
"The process of implementing the transformation plan has already begun. Already in 2025, we will be able to observe the first effects (...)," JSW's CEO Ryszard Janta said.
"2027 is expected to be the first year when the effect will be full. It is important that this is not a one-off effect, but a lasting one that will be repeated in subsequent years," he added.
A few days ago, JSW's supervisory board adopted the strategic transformation plan prepared by the management board. JSW estimates that the implementation of the changes will have a positive financial impact of PLN 8.5 billion (EUR 2 bln) in 2025 -2027.
As the company stated, this amount consists of increasing the volume and margin of mining, introducing a number of changes in purchase planning and material management, reducing unnecessary capital expenditures, and simplifying and digitising support function processes in all group companies.
"The financial effects of the plan have been estimated at the full potential of PLN 8.5 billion, where the maximum will occur in 2026 and 2027, when the effects of the change in the philosophy of running the mining part in the form of the 'Efficient Mine' [programme] will be most contributory," JSW's deputy CEO Jaroslaw Kluczniok said.
"The effects will be spread over time and will amount to approximately PLN 3 billion in each year. In 2026, the effects will be slightly lower and will amount to about PLN 2.6 billion, because the costs of conducting the transformation and preparatory works will be slightly increased," he added.
As the deputy CEO Kluczniok pointed out, initially, the effects will mainly come from investments and the reconstruction of the procurement process.
"Our main objective is to improve the company's liquidity position, so in the first year the main elements of the transformation process will also aim to restructure the philosophy of investment decisions," he said.
"In terms of CAPEX, we anticipate an effect of PLN 1.5 billion in 2025," he added.
The deputy CEO Adam Rozmus said that CAPEX would be aligned with production plans for the following years.
CEO Ryszard Janta, asked why the restructuring plan does not include employee issues, replied: "The priority of the plan is to increase the level of production, to increase efficiency. The fact is that the management sees the need to tidy up the remuneration rules".
"There is more than one type of contract in the company and even in one plant in the mine. This is an area that needs to be tidied up and discussions with the social side are ongoing in this regard. We will report on the results of the discussions, but this is not part of the transformation plan," the CEO added.
The deputy CEO Remigiusz Krzyzanowski said that work is ongoing on the level of costs by type, including personnel costs.
"We take a very restrictive approach to employment, which is de facto non-existent at JSW SA. At the same time, 202 employees have left the company in recent months as a result of natural departures. This clearly translates into a reduction in employee costs," JSW's CEO Janta said.
"The management's objective is to at least maintain this level at the same values in the future," he added.
pel/ ao/