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OKD outlines cost savings and further business optimisation steps

OKD outlines cost savings and further business optimisation steps

OSTRAVA (16 May 2013) – OKD has outlined significant cost savings in operations, salaries and wages and capital expenditure. Further steps that should ensure the company’s higher mining efficiency and provide better immunity to the impacts of the unfavourable global coal market development include mine management merger and other changes in the organizational structure of the company. OKD thus responds to the currently critical economic situation both in Europe and in the Czech industry. The company management says cost savings will not affect work safety; development plans at Karviná Mine shall also continue as scheduled.

 

“We have to offset all external impacts starting with increasing thermal coal imports of American coal to Europe reducing significantly thermal coal price on the markets through the decline of the European economy impacting metallurgical coal prices up to non-systemic political measures, activities of some environmental initiatives and other influences. Many of them apply in the long-term and therefore we must come up with a long-term change of our business structure and system. It will be painful but it is also the only way to preserve the stability of the business and of other related industries in our region,” says Ján Fabián, OKD CEO and Chairman of the Board of Directors.

 

The first part of the adopted measures covers immediate cost-saving actions including, among others, a 10% labour cost cut, contractor* cost reduced by up to CZK 125 million or material and administration cost savings providing in total more than CZK 100 million by year-end. Capital expenditure cutbacks, optimisation of payables and receivables as well as sell down of thermal coal from the inventory worth almost CZK 400 million are also temporarily applied.

 

Longer-term measures are related to production optimisation assessing in particular the efficiency of coal mining in individual areas of the district. Mine management centralization as well as administration headcount cuts are being prepared. “We have to break the individual measures into details and discuss them with our employees,” adds Fabián.

 

*Contractors – Employees of external companies involved in OKD’s production activities, in particular in coal mining.

 

Vladislav Sobol

OKD Spokesperson

 

Mobile: 725 595 417
E-mail: vladislav.sobol@okd.cz

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