Integrated Report of KGHM Polska Miedź S.A.
and the KGHM Polska Miedź S.A. Group
for 2020

8.1 Capital management policy

in PLN millions, unless otherwise stated


In accordance with market practice, the Group monitors the level of financial security, among others on the basis of the Net Debt/EBITDA ratio presented in the table below:

Ratios Calculations 31 December 2020 31 December 2019
Net Debt/EBITDA relation of net debt to EBITDA 0.9 1.5
Net Debt* borrowings, debt securities and lease liabilities less free cash and its equivalents 4 834 6 891
Adjusted EBITDA** profit on sales plus depreciation/amortisation recognised in profit or loss and impairment losses on non-current assets 5 277 4 569
* Net debt does not include reverse factoring liabilities
** Adjusted EBITDA for the period of 12 months ended on the last day of the reporting period excluding EBITDA of the joint venture Sierra Gorda S.C.M.


In the management of liquidity and capital, the Group also pays attention to adjusted operating profit, which is the basis for calculating the financial covenant and which is comprised of the following items:

from 1 January 2020
to 31 December 2020
from 1 January 2019
to 31 December 2019
Profit on sales 3 161 2 455
Interest income on loans granted to a joint venture 377 341
Other operating income and (costs) (624) 186
Adjusted operating profit* 2 914 2 982
* presented amount does not include the reversal of allowances for impairment of loans granted to joint ventures


As at the end of the reporting period, in the financial period and after the end of the reporting period, up to the date of publication of these consolidated financial statements, the value of the financial covenant subject to the obligation to report as at 30 June 2020 and 31 December 2020, met the conditions stipulated in the credit agreements.

In order to maintain financial liquidity and the creditworthiness enabling the obtainment of external financing with the optimum level of costs, the Group’s long term aim for the level of the Net Debt/EBITDA ratio is to be not more than 2.0.

Search results