* NWR posts a surprise net loss, revenue falls 48 percent
* Shares plunge by up to 19 pct
* Co. cuts FY production target
* CFO says market uncertainty high, targets may change
(Adds CFO comments, analyst, share reaction)
By Jan Korselt
PRAGUE, May 18 (Reuters) - Miner New World Resources (NWR)
posted a surprise first-quarter net loss of 2.14 million euros
and said it would cut full-year production targets as demand
slumped amid the global economic downturn.
Analysts expected the group, owner of the Czech Republic's
largest hard coal mines, to post 13.7 million euros profit,
sharply down from 117.8 million last year. NWR's shares plunged
around 19 percent in Prague following the results statement.
"It was a little worse than even the pessimistic
(analysts') outlook, especially on the sales side," said Bram
Buring, a Prague-based analyst at Wood & Co.
"The volumes that they were able to put out there were much
worse than expected - they are not seeing any improvement in
that right now," Buring said.
Revenue fell 48 percent in the quarter to 270.27 million
euros, below analysts' average estimate of 358.1 million. The
group said net sales in the period dropped 35 percent.
The global economic downturn impacted industrial output in
central and eastern Europe with steel production in the region
falling by some 41 percent compared with the same period in the
previous year, NWR's executive chairman Mike Salamon said in a
statement accompanying the results.
Falling Western demand for goods from central Europe has
punished the region's export-driven economies. The Czech economy
contracted a record 3.4 percent in the first quarter.
LOWER TARGET, INVENTORIES
The miner said off-take in coal and coke volumes was lower
than expected in the quarter, leading to higher inventories, and
that it cut its full-year production target to 10.5 million
tonnes from 12.1 million.
NWR's chief financial officer told Reuters in a brief
telephone interview there was a high level of uncertainty
surrounding the new target.
"We definitely will have to watch the situation on the coal
and coke market closely for the rest of the year, and possibly
make further adjustments (concerning production and prices),"
NWR's Marek Jelinek said, adding the priority for the firm was
to keep mining volumes running due to high fixed costs.
"Inventories are somewhat higher than we were targeting, and
the (revised) production target actually assumes, that the
inventory will (fall) slightly, but not in a big way," Jelinek
said.
Wood & Co's Buring said there was a risk that if the trading
conditions did not improve in the second half of the year NWR
"could undershoot the production target, especially if (it)
holds to its target to decrease inventories by the end of the
year."
The company said it continued to study its planned 800
million mining project in Poland's Debiensko mine, and may delay
development of the mine by several months to save cash.
NWR shares -- listed in Prague, Warsaw and London -- have
plunged by more than 78.9 percent since its initial public
offering in May 2008, when it sold a 36.2 percent stake for 1.3
billion pounds ($1.98 billion).
The stock had jumped more than 60 percent to a six-month
high of 126.9 crowns in May, in line with the rally in the
sector after upbeat Wall Street notes.
At 0821 GMT NWR shares were 13.67 percent lower at 92.4
crowns, Prague's main index <> fell 1.5 percent.
(Writing by Jana Mlcochova, additional reporting by Jason
Hovet; editing by David Cowell and Jon Loades-Carter)
