annual report 2004 - Severočeské doly a.s.

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Outlook for 2005
Territorial ecological mining limits will be set as part of the process of approving the Ústecko Region
Land-Use Plan. Brown-coal mining will continue its downward trend, which means that Severočeské
doly will have to try to cut costs further. In order to fulfil the Government Energy Concept, a number
of conceptual decisions are expected from energy producers regarding the reconstruction or
new construction of operating technologies; based on these decisions, the company will elaborate
on its investment plans for the upcoming period.
The company forecasts total coal mining of 20.5 million tonnes; the main customer, ČEZ, will account
for approximately 80% of the company’s total sales. A 5.7% year-on-year drop in coal product sales
is expected. Depending on the volume of coal sales, it will be necessary to make arrangements
for the removal of overburden and free up the coal substance in the seam in good time. Therefore, it
will be necessary to excavate at least 75 million m 3 of overburden.
In its business plan, the company has set itself the goal of making a net profit of CZK 1.2 billion, even
though there will be a year-on-year reduction in coal sales. The successfully established policy of making
savings in operating costs and in enhancing the profitability of total assets will continue.
There are plans to invest more than CZK 900 million. Besides the acquisition of new mining technology,
the approved investment programme includes the reconstruction and modernization of existing
equipment, dressing operations, and the replacement of ancillary mechanical facilities. The transport
and drainage systems required by the quarries will be set up along with a power supply and
the implementation of environmental projects. In 2005, work will continue on implementing the new
SAP integrated information system.
The reclamation process will advance in accordance with long-term plans for the final formation
of the landscape over a total area of 2,567 ha. A cleanup and reclamation reserve of CZK 432 million
will be created based on the estimated volume of coal excavation in 2005.
There will be no more large-scale redundancies of the kind we have witnessed in recent years.
The average headcount will be 3,637 employees, i.e. a year-on-year fall by 87 persons. A rise in tariff-based
wages by 5.5% to 6.0% was agreed for 2005 in the collective agreement; the average monthly
wage should therefore rise to CZK 21,860.