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By Adrian Krajewski and Marcin Goettig
WARSAW, March 25 (Reuters) - Europe’s second largest copper producer, Poland’s KGHM, said on Tuesday it would not publish its net profit guidance for 2014 due to high market volatility in the metal.
“We will present our budget assumptions on Friday,” Chief Executive Officer Herbert Wirth said, confirming an earlier Reuters report.
“They will include our forecast average copper price and cost, but there will be no net profit guidance because of very high market volatility,” he told Reuters, adding KGHM expects 2014 average copper price in the range of $6,800-7,200 a tonne.
Analysts polled by Reuters expected the state-controlled miner to target a net profit of 2.26 billion zlotys ($742 million), its lowest profit since 2004 due to falling copper prices.
Tumbling copper prices have already made KGHM - also the world’s largest silver producer - miss its last-year net profit target of 3.2 billion zlotys with a 3.06 billion reading.
London copper touched its lowest in three-and-a-half years at $6,321 a tonne last week, as slowing growth in top user China fuelled concerns that commodities importers may come under pressure to liquidate stocks.
Hopes that China will act to support its economy helped London copper edge up to its highest in nearly a week on Tuesday. KGHM shares followed suit with a 3-percent gain in Warsaw trade.
KGHM usually forecasts for unconsolidated net profit - profit generated only by the parent company - because this is the basis for dividend payouts and its subsidiares do not add much to the figure.
However, it may have to switch to using group profit for forecasts after its Chilean Sierra Gorda mine begins production. Sierra Gorda, which is one of the world’s largest copper projects, is due to begin production in the second quarter of this year. ($1 = 3.0464 Polish Zlotys) (Editing by William Hardy)