JSW shares have not been quoted this low since November 2020. During Monday’s session, they even dropped below PLN 23, and at the end of the session fell by 4.7 percent And all this because of the valuation given to them by Santander analyst Paweł Puchalski.
According to Bloomberg, he estimated the value of a single share in the company at PLN 7, or more than 71 percent less than it was quoted at the close of the session on Friday. At this valuation, the entire company would be worth PLN 822 million.
For comparison, another state-owned company, PKP Cargo, which is close to bankruptcy and is currently conducting group layoffs, is valued on the stock exchange at PLN 889 million, which is higher than JSW’s valuation. And yet, in the last five years, JSW has made a net profit of PLN 8.2 billion, while PKP Cargo was in the red by PLN 355 million during the same period.
The recommendation is “worse than the market”, meaning it will pay off more to hold the market (e.g. WIG20 index) than JSW shares. The Santander analyst predicts that this year the company will achieve PLN 12.1 billion in revenue and PLN 1.25 billion in EBITDA (operating profit plus depreciation). However, the forecast net loss amounts to as much as PLN 2.29 billion, and in 2025 — PLN 1.2 billion.
Read also in BUSINESS INSIDER
Relationships ready for confrontation
As we wrote recently, in order not to lose financial liquidity at low prices of coking coal and coke and with extraction lower than forecast, Jastrzębska Spółka Węglowa is once again making a broad gesture to use savings collected for a rainy day. Mining unions are warning that some managers are in favor of reducing employment. They are preparing for a confrontation.
— The management boards of the previous term and the current one caused the company to find itself in a difficult situation. Instead of using the geographic rent, long-term contracts that we have with key customers in Europe, we give the field to other producers from the USA, Australia or Africa. Our coal in European steel mills is “pushed out” by coal from Mozambique. Steel mills in Austria or Germany buy products from Indonesia, because can’t wait for those from Poland, from JSW. This is unimaginable for us, Sławomir Kozłowski, chairman of Solidarity in JSW, commented for Business Insider in July.
The Supervisory Board has already approved the withdrawal of almost one billion zlotys from the stabilization fund.powered by better times.
— After the last meetings of the supervisory board of our company, where we have representatives of the staff, we have received information that the solution to this situation is a recovery plan and layoffs, including production workers. People who previously worked in Polish mining and are now members of our supervisory board, They propose to lay off 20-40 percent of the staff. These are crazy ideas and we will never allow it! — Kozłowski warned.
