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WARSAW, Aug 13 (Reuters) - Poland’s JSW, the European Union’s largest coking coal miner, said it swung to a net loss of 343 million zlotys ($109.4 million) in the first half of the year due to falling coal prices and lower output.
Analysts polled by Reuters expected the state-controlled miner to report a slightly larger loss of 356 million zlotys compared with a net profit of 167 million zlotys a year ago.
“There is risk that clients will await further price cuts, which implies the possibility of even greater losses in the upcoming quarter,” Espirito Santo analyst Maciej Hebda said.
“In such a situation, we expect that the company would close this year with big net debt and in 2015 it would be forced to restructure and review operating assets” to determine whether they should continue producing.
JSW has already said it expects to end this year with a loss and cut its investment plan for the next three years by 1.15 billion zlotys to 1.8 billion annually due to lower prices.
“We expected the second quarter to be the hardest this year, as the fall in market prices was very serious,” JSW Chief Executive Jaroslaw Zagorowski said in a statement on Wednesday, adding the group also experienced tough mining conditions.
“We now act so that we can achieve the planned production levels this and next quarter, which would imply a better result.”
In April, JSW agreed to buy the Knurow-Szczyglowice mine from rival Kompania Weglowa, which is also state-controlled, for 1.49 billion zlotys. JSW plans to issue up to $774 million in bonds to finance the acquisition.
1 US dollar = 3.1343 Polish zloty Reporting by Anna Koper and Adrian Krajewski; editing by Jane Baird