The total debt of the KGHM Group on account of credit and loans as at the end of 2017 was PLN 7,156 million and decreased as compared to the end of 2016 by PLN 942 million (11.6 percent) mainly because of the fall in the USD/PLN exchange rate. The Group’s funds are short-term in nature and, in 2017, they were kept first of all in the current account linked within the Cash Pool service, which allows for optimizing revenues and interest expenses in the Group.
Under bilateral agreements executed with banks, the Group uses working capital loans and current account overdrafts with maturities up to 2 years. In connection with successive extensions of the availability of financing under bilateral contracts for further periods, the liquidity risk associated with received short-term loans is assessed by the Group to be low.
As at 31 December 2017, the Group had open credit facilities and loans with the total balance of available financing equivalent to PLN 15,009 million, from which PLN 7,177 million was used. The sources of financing worth mentioning include in particular:
- Unsecured renewable consortium loan for USD 2,500 million received by KGHM Polska Miedź S.A. based on a financing agreement entered into with a consortium of banks in 2014, with maturity on 9 July 2021. The funds received within the granted loan are earmarked for f nancing general corporate objectives, including continued performance of investment projects.
Available financing amount: PLN 8,703 million Used amount: PLN 3,483 million
- Loans, including investment loans, granted to KGHM Polska Miedź S.A. by the European Investment Bank
Available financing amount: PLN 2,906 million Used amount: PLN 1,967 million
- Bilateral loans for financing working capital, which are tools supporting financial liquidity management and helping finance the investment projects performed by the Group
Available financing amount: PLN 3,400 million Used amount: PLN 1,727 million
Structure of the Group’s net debt (PLN million)
| 31.12.2017 | 31.12.2016 | Change (%) | 30.09.2017 | 30.06.2017 | 31.03.2017 | |
|---|---|---|---|---|---|---|
| Liabilities on account of: | 7,156 | 8,098 | (11.6) | 7,225 | 7,134 | 7,674 |
| Bank loans* | 5,179 | 6,391 | (19.0) | 5,133 | 5,008 | 6,065 |
| Loans | 1,967 | 1,684 | +16.8 | 2,079 | 2,110 | 1,590 |
| Other | 10 | 23 | (56.5) | 13 | 16 | 19 |
| Available cash and its equivalents | 579 | 836 | (30.7) | 400 | 428 | 618 |
| Net debt | 6,577 | 7,262 | (9.4) | 6,825 | 6,706 | 7,056 |
* presented taking into account the paid preparatory commission reducing the f nancial liabilities under received loans.
Net debt structure of KGHM Polska Miedź S.A (PLN million)
| 31.12.2017 | 31.12.2016 | Change (%) | 30.09.2017 | 30.06.2017 | 31.03.2017 | |
|---|---|---|---|---|---|---|
| Liabilities on account of: | 7,168 | 7,932 | (9.6) | 7,242 | 7,211 | 7,521 |
| Bank loans* | 5,067 | 6,253 | (19.0) | 5,017 | 4,888 | 5,936 |
| Loans | 1,941 | 1,679 | +15.6 | 2,065 | 2,096 | 1,585 |
| Cash pool | 160 | - | x | 160 | 227 | - |
| Available cash and its equivalents | 231 | 481 | (52.0) | 122 | 105 | 344 |
| Net debt | 6,937 | 7,451 | (6.9) | 7,120 | 7,106 | 7,177 |
* presented taking into account the paid preparatory commission reducing the f nancial liabilities under received loans