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WARSAW, Nov 14 (Reuters) - Polish miner KGHM, one of the world’s biggest copper producers, on Tuesday reported an 84 percent rise in third-quarter consolidated net profit to 604 million zlotys ($167.36 million) on the back of higher copper prices.
The state-run miner said its net profit also rose because losses related to its Chilean Sierra Gorda mine are no longer weighing on the group’s results after it wrote off the foreign asset’s value to zero.
The Sierra Gorda mine is KGHM flagship foreign project, which it bought in 2011 for C$2.87 billion ($2.25 billion) in the largest-ever foreign acquisition by a Polish company.
But it has struggled to master complex ores and high production costs at a time of falling copper prices. As a result KGHM booked a huge impairment related to its foreign assets in 2015 and 2016.
The bottom line came in slightly below the average analysts forecasts of 611 million zlotys.
KGHM also said revenue rose by 2 percent year on year in the third quarter to 4.77 billion zlotys. The 33 percent rise in copper prices in the period was offset by the need to build up stockpiles ahead of the fourth quarter, the company said.
KGHM’s output of electrolytic copper from own concentrates fell by 3 percent in the first three quarters of 2017 to 273,000 tonnes, which compares to 401,000 the company had expected for the whole year.
At a stand-alone level, on which KGHM’s dividends are based and which reflects the company’s Polish operations, the miner booked a net profit of 540 million zlotys compared with 614 million zlotys a year earlier. ($1 = 3.6090 zlotys) ($1 = 1.2731 Canadian dollars) (Reporting by Agnieszka Barteczko. Editing by Jane Merriman and David Evans)