New World Resources Regulatory News (NWR)

Amsterdam, 23 August 2012

New World Resources

Unaudited interim results for the first half 2012

New World Resources Plc ('NWR' or the 'Company') today announces its financial results for the six-month period ended 30 June 2012.

H1 2012 Financial highlights

§ Revenues of EUR 694 million, down 17%

§ Mining unit costs at EUR 80/t, down 2%

§ EBITDA of EUR 158 million, down 37%

§ Net profit of EUR 35 million

§ Basic EPS of EUR 0.12

§ Interim dividend of EUR 0.06 per A share

§ Net debt of EUR 472 million

§ No significant short-term debt maturities

H1 2012 Operational highlights

§ Coal production of 5.8Mt, and external sales of 4.8Mt (55% coking coal)

§ Coke production of 349kt, and external sales of 303kt

§ LTIFR[1] at 7.56, down 1% on FY 2011

§ Karvina Mine expansion on track

§ Debiensko project review underway - outcome around year-end

FY 2012 Outlook

§ Coal production target slightly increased to 11.0-11.1Mt

§ Coke production target maintained at 700kt

§ Coal and coke external sales targets of 10.3-10.4Mt and 600kt respectively

§ Expected external coal sales split of 48% coking coal and 52% thermal coal

§ Q3 coking coal and coke prices agreed at EUR 129/t and EUR 294/t respectively

§ Expected flat mining unit costs year-on-year at constant FX

§ Expected CAPEX of EUR 210-220 million

Chairman's statement

Despite a promising start to 2012, the regional market became increasingly challenging as the year progressed. The prevailing structural problems in the Eurozone area have continued to impact business sentiment resulting in a slowdown in the regional steel market. Globally, the world has been facing an oversupplied coking coal market with falling spot prices.

Against this backdrop, NWR's performance for the first six months of the year has been solid as we were able to counterbalance the challenging pricing environment with an improved coal mix, strong production and tight cost control. Halfway through the year, we are reporting flat operating costs in the local currency, which is a good result given both the increasing cost challenges facing the industry, and the increasing average depth of our mines.

Since the international premium hard coking coal benchmark price was set in June 2012, global spot coking coal prices have been on a decreasing trajectory, a trend, which has been compounded in our region by the abundance of semi-soft coking coal in the area. The gap between the premium hard coking coal benchmark and spot price developments of lower coking coal grades has therefore widened, partially decoupling the regional pricing from the reference to the quarterly international premium hard coking coal benchmark. And consequently, the recently announced blended coking coal price of EUR 129/t agreed for the third quarter was marginally above the second quarter average realised price of EUR 127/t.

Our thermal coal prices are locked in for the year at an average blended price of EUR 74/t, an 11 per cent increase on the previous year and we expect to increase thermal coal sales towards the year-end in line with the usual seasonal trends.

Our third quarter agreed coke prices remain broadly flat on the previous quarter at EUR 294/t with the continuing high proportion of foundry coke in the sales mix. This is a good result for a merchant coke producer like NWR given the ongoing stagnation in the European coke market.

Our order books for the second half of 2012 remain full and in FY 2012 we now expect to produce 11.0 - 11.1Mt and externally sell 10.3 - 10.4Mt of coal, bringing year-end inventories down to the 500-600kt level. We are also well on track to deliver an improved coal mix with an expected 48% of external coking coal sales for FY 2012 against 44% last year.

A thorough review of the Debiensko project is underway which will take several months to complete. As announced in May the review was triggered by the change in water management conditions and by inflationary pressures in mine development in Poland. As the review is a complex process, we cannot comment on partial results and we expect to come back to the market around the end of the year.

At our current operations, the expansion projects at the Karvina Mine to unlock a further 30Mt of hard coking coal by 2017 are progressing to schedule.

Earlier this year we published our first Sustainability Report, underlining our continued commitment towards our goal of delivering coal and coke safely and in a sustainable manner, despite the many challenges posed by the ongoing economic downturn.

Our Lost Time Injury Frequency Rate continues to move down and now stands at 7.56 lost-time injuries per million hours worked and our focus is very much on the target of less than five by 2015. Despite our ongoing vigilance, the hazards of deep underground mining have, sadly, taken the lives of three of our colleagues since the beginning of the year. This serves to underline why safety is our number one priority.

While we are mindful of the near-term headwinds facing the region, the underlying medium to long-term fundamentals of our target market remain intact, and we remain confident in our business model. NWR's long-standing relationships with its customers in the region underpin our market position. Additionally, the increasing orientation of our customers towards high value-added, specialised steel products such as those used in the automotive industry, for building high-speed railways and for specialised mechanical engineering, is improving the competitiveness of the regional steel sector, our principal customer market.

Given our solid performance during the first half of the year and reasonable short-term visibility I am pleased on behalf of the Board to announce an interim dividend of 6 Eurocents per share, in line with NWR's dividend policy of paying out 50 per cent of Net income over the course of the business cycle.

We previously announced that Gareth Penny will be joining NWR as Executive Chairman in October, and we are delighted to welcome him to the management team. I look forward to working with him in the coming weeks to ensure a smooth transition. The past five years have seen the Company's transformation into a world-class underground coal miner and NWR is in good shape to continue with the next stage of its development under Gareth's leadership.

Mike Salamon, Executive Chairman of NWR

Selected consolidated financial and operational data

NWR's Revenues were EUR 146 million lower in H1 2012 compared to H1 2011 mainly due to lower coking coal prices. The lower volume of external coal sales was offset by an improved coal mix (a higher proportion of coking coal in the sales mix.)

Lower costs and an increase in inventories in H1 2012 partially offset the impact of lower coal and coke prices on the Company's EBITDA which was EUR 158 million in H1 2012, a EUR 92 million decrease compared to H1 2011. Depreciation and amortisation charges remained flat in CZK terms year-on-year leaving the Operating profit for the period at EUR 71 million.

Net financial expenses decreased due to a lower net foreign exchange loss, and a higher net profit on derivatives revaluation when compared to H1 2011. The profit before tax was EUR 48 million, EUR 72 million below H1 2011.

The Company's effective tax rate remained stable at 29% and NWR's consolidated after-tax profit for the period was EUR 35 million, down EUR 52 million versus H1 2011. The Basic earnings per A share for the six-month period ended 30 June 2012 amounted to EUR 0.12.

Operating cash flow before working capital changes was EUR 161 million, EUR 67 million lower than in H1 2011, mainly reflecting lower revenues. Changes in working capital were negative EUR 32 million mainly due to an increase in inventories. As such Operating cash flow before taxes and interest was EUR 129 million. Net operating cash flow after interest (EUR 32 million) and income tax (EUR 37 million) for H1 2012 was EUR 60 million, EUR 61 million lower than in H1 2011.

Total capital expenditure in H1 2012 was EUR 123 million. This included maintenance CAPEX for both mining and coking segments, mining equipment renewal, vertical and horizontal mine developments, safety CAPEX as well as EUR 5 million spent on the Debiensko project. There is no further CAPEX planned for Debiensko for the rest of 2012 due to the ongoing review of the project. For FY 2012 we have allocated EUR 210-220 million on capital expenditures.

The Company paid out the final dividend of EUR 19 million to its A shareholders in May 2012 and also repaid EUR 7 million of the ECA loan. The Cash and cash equivalents were at EUR 452 million as at 30 June 2012 including EUR 100 million of proceeds from the RCF loan.

As at 30 June 2012, the Company's Net debt was EUR 472 million. NWR has no significant debt maturities until 2015. During 2012 we will continue to monitor the markets closely so that we are able to take advantage of opportunities either to raise new financing or to refinance outstanding debt or portions thereof as they arise.

Dividend

NWR's dividend policy is to target distribution of approximately 50% of the Mining Division's consolidated annual Net income over the course of the business cycle. Consistent with this policy, the Board of Directors has proposed an interim dividend for the six-month period ended 30 June 2012 of EUR 0.06 per share, which will be paid to A shareholders of the Company on 19 September 2012.

Subject to various exceptions and exemptions, shareholders are generally subject to Dutch dividend withholding tax at the rate of 15% on dividends distributed, which the Company is required to withhold and account for to the Dutch tax authorities. Shareholders should consult their own tax advisers as to their particular tax consequences for receiving dividends from NWR.

The dividend for NWR is declared in Euros. Shareholders may elect to receive this dividend in Pounds Sterling or Euros. The default election will be deemed to be Euros if a shareholder expresses no preference. The Pounds Sterling amount payable will be determined by reference to the exchange rate applicable to the Euro on 11 September 2012.

The timetable with respect to the interim dividend will be:

Ex-dividend London, Prague and Warsaw Stock Exchanges 5 September 2012

Record date (record time is close of market) 7 September 2012

Currency election closing date 10 September 2012

Euro exchange rate fixed and announced 11 September 2012

Payment date 19 September 2012

Further details regarding dividend payments, together with currency election and dividend mandate forms, are available for download from NWR's website (www.newworldresources.eu) or from the Company's registrars.

Coal segment

Total coal production in H1 2012 was 1% below the level in H1 2011, and external coal sales volumes were 11% lower due to reduced volumes of thermal coal. External coking coal sales volumes increased 12% year-on-year. Total revenues for the coal segment decreased by 19%, mainly due to lower coking coal prices and lower thermal coal volumes.

External coking coal sales in H1 2012 comprised of approximately 49% hard coking coal (mid-volatility), 44% semi-soft coking coal, and 7% PCI coking coal. Thermal coal sales in the period were approximately 78% thermal coal and 22% middlings.

Mining unit costs remained flat in CZK terms in the first six months of 2012 compared to H1 2011 in line with the Company's guidance. All main cost categories remained well under control.

The coal segment generated EBITDA of EUR 158 million, a decrease of 39% compared to H1 2011 due to lower revenues.

Coal segment outlook

As previously announced, the average agreed price of coking coal for delivery in the third calendar quarter of 2012 is EUR 129 per tonne, an increase of 2% compared to the second quarter realised price. This average price is based on an expected Q3 2012 coking coal sales mix of approximately 48% hard coking coal (mid-volatility), 46% semi-soft coking coal, and 7% PCI coking coal. The average price agreed for thermal coal sales for the 2012 calendar year is EUR 74 per tonne, an 11% increase compared to the 2011 average realised price. This average price is based on an expected FY 2012 mix of 82% thermal coal and 18% middlings.

NWR now expects production of between 11.0Mt and 11.1Mt of coal and external sales of between 10.3Mt and 10.4Mt of coal in FY 2012. As previously announced, the external sales split is expected to be approximately 48% coking coal and 52% thermal coal in FY 2012.

NWR continues to expect its mining unit costs to remain broadly flat in FY 2012, excluding any impact from foreign exchange fluctuations.

Coke segment

Revenues for the coke segment decreased by 19% due to a decrease in both sales volumes and prices in H1 2012. Coke sales in H1 2012 were approximately 69% foundry coke, 19% blast furnace coke, and 12% other types.

Coke conversion unit costs increased by 5% on a constant currency basis as a result of the 13% drop in production. Together with the lower cost of inputted coal, both internal and external, the impact of lower revenues on the operating result was muted and EBITDA was EUR 6 million in H1 2012, which is only EUR 3 million lower than EBITDA in the comparable period of 2011.

Coke segment outlook

As previously announced, the average price of coke agreed for delivery in the third calendar quarter of 2012 is EUR 294 per tonne, a 1% decrease compared to the second quarter realised price. This average price is based on the expectation of Q3 2012 sales of approximately 67% foundry coke, 13% blast furnace coke and 20% other types.

NWR continues to expect to produce 700kt and sell 600kt of coke in FY 2012.

Coke unit conversion costs on a constant currency basis are expected to increase in line with the expected decrease in production in FY 2012.

H1 2012 earnings investor/analyst presentation

NWR's management will host an analyst and investor presentation on 23 August 2012 at 10:00 BST (11:00 CET) to discuss the financial results for the period. The presentation will be held at the London Stock Exchange at 10 Paternoster Square.

The presentation will be also made available via a live video webcast on www.newworldresources.eu and the webcast will be then archived on the Company's website.

Dial in details:

UK & the rest of Europe +44 (0) 3364 5381

US +1 646 254 3360

Czech Republic (Toll free) 800 701 229

Poland (Toll free) 00 800 121 4330

The Netherlands +31 (0) 20 713 2789

Access Code 4072730

A replay of the conference call will be available for one week by dialling:

+44 (0) 20 3427 0598 (Access code: 4072730)

For further information:

Investor Relations Corporate Communications

Radek Nemecek Petra Masinova

Tel: +31 20 570 2244 Tel:+31 20 570 2229

Email: rnemecek@nwrgroup.eu Email: pmasinova@nwrgroup.eu

Website: www.newworldresources.eu

About NWR

New World Resources Plc is one of Central Europe's leading hard coal and coke producers. NWR produces quality coking and thermal coal for the steel and energy sectors in Central Europe through its subsidiary OKD, the largest hard coal mining company in the Czech Republic. NWR's coke subsidiary OKK, is Europe's largest producer of foundry coke. NWR currently has several development projects in Poland and the Czech Republic, which form part of NWR's regional growth strategy. NWR is a FTSE 250 company, with listings in London, Prague and Warsaw.

Disclaimer and Cautionary Note on Forward Looking Statements and Notes on Certain Other Matters

Certain statements in this document are not historical facts and are or are deemed to be "forward-looking". The Company's prospects, plans, financial position and business strategy, and statements pertaining to the capital resources, future expenditure for development projects and results of operations, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology including, but not limited to; "may", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "will", "could", "may", "might", "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These forward-looking statements involve a number of risks, uncertainties and other facts that may cause actual results to be materially different from those expressed or implied in these forward-looking statements because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond NWR's ability to control or predict. Forward-looking statements are not guarantees of future performances.

Factors, risk and uncertainties that could cause actual outcomes and results to be materially different from those projected include, but are not limited to, the following: risks relating to changes in political, economic and social conditions in the Czech Republic, Poland and the CEE region; future prices and demand for the Group's products, and demand for the Group's customers' products; coal mine reserves; remaining life of the Group's mines; coal production; trends in the coal industry and domestic and international coal market conditions; risks in coal mining operations; future expansion plans and capital expenditures; the Group's relationship with, and conditions affecting, the Group's customers; competition; railroad and other transportation performance and costs; availability of specialist and qualified workers; and weather conditions or catastrophic damage; risks relating to Czech or Polish law, regulations and taxation, including laws, regulations, decrees and decisions governing the coal mining industry, the environment and currency and exchange controls relating to Czech and Polish entities and their official interpretation by governmental and other regulatory bodies and by the courts; and risks relating to global economic conditions and the global economic environment. Additional risk factors are as described in the NWR's annual report.

Forward-looking statements are made only as of the date of this document. The Company expressly disclaims any obligation or undertaking to release, publicly or otherwise, any updates or revisions to any forward-looking statement contained in this report to reflect any change in its expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based unless so required by applicable law.

This document does not contain or constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities in the United States or in any other jurisdiction.

New World Resources Plc

Consolidated income statement

All activities were with respect to continuing operations.

The notes on pages 17 to 35 are an integral part of this condensed consolidated financial information.

New World Resources Plc

Consolidated statement of comprehensive income

The notes on pages 17 to 35 are an integral part of this condensed consolidated financial information.

New World Resources Plc

Consolidated statement of financial position

New World Resources Plc

Consolidated statement of financial position (continued)

The notes on pages 17 to 35 are an integral part of this condensed consolidated financial information.

New World Resources Plc

Consolidated statement of cash flows

The notes on pages 17 to 35 are an integral part of this condensed consolidated financial information.

New World Resources Plc

Consolidated statement of changes in equity

The notes on pages 17 to 35 are an integral part of this condensed consolidated financial information.

Corporate Information

New World Resources Plc ('NWR Plc' or the 'Company') is a public limited liability company with its registered office at One Silk Street, London EC2Y 8HQ, United Kingdom. The Company is the sole producer of hard coal in the Czech Republic and one of the leading hard coal and coke producers in Central Europe. NWR Plc produces coking and thermal coal through its subsidiary OKD, a.s. ('OKD') and coke through its subsidiary OKK Koksovny, a.s. ('OKK'). NWR Plc and its subsidiaries are collectively referred to as 'the Group'.

The Group operates four mines and four coking batteries in the Czech Republic and currently has two development projects in Poland. The Group serves several large Central and Eastern European steel and energy producers, mainly in the Czech Republic, Poland, Austria, Slovakia, Hungary and Germany. Among its key customers are Arcelor Mittal Steel, U.S. Steel, Dalkia, Moravia Steel, voestalpine, Verbund and ČEZ.

The Group's largest source of revenue is the sale of coking coal, which accounted for 51% of total revenues in 6M 2012, followed by the sale of thermal coal (23%) and the sale of coke (13%).

The majority of our coal sales are based on long-term framework agreements. Thermal coal sales are priced on a calendar year basis. All of the Group's coking coal and coke sales are priced quarterly.

Financial Results Overview

Revenues. The Group's revenues decreased by 17% (16% on a constant currency basis), from EUR 839,990 thousand in 6M 2011 to EUR 694,040 thousand in 6M 2012. This is mainly attributable to decreased revenues from coking coal and coke, driven by lower prices as well as to decreased revenues from thermal coal, driven by lower sales volumes.

Operating expenses. Total operating expenses including depreciation and amortisation, net of other operating income and gain/loss from sale of material and property, plant and equipment, decreased from EUR 698,586 thousand to EUR 667,727 thousand or by 4% (2% on a constant currency basis) in 6M 2012 compared to the same period in 2011. This is mainly attributable to the decrease in:

·; prices and consumed volumes of externally purchased coking coal resulting in lower costs of external coking coal used for coke production;

·; advisory expenses as a result of one-off costs incurred in relation to the reincorporation process in 2011; as well as

·; planned maintenance works year on year resulting in lower maintenance costs during the reporting period.

EBITDA. EBITDA decreased by 37% from EUR 249,560 thousand in 6M 2011 to EUR 157,682 thousand in 6M 2012. The decrease in revenues of EUR 145,950 thousand was only partly offset by a decrease in total operating expenses, before depreciation and amortisation, gain from sale of PPE and net of changes in inventories, of EUR 54,072 thousand.

Basis of Presentation

General information

The condensed consolidated interim financial information (the 'financial information') presented in this document is prepared for the six-month period ended 30 June 2012, with the six-month period ended 30 June 2011 as the comparative period.

The Company was incorporated on 30 March 2011 as part of a corporate reorganisation under which, on 6 May 2011, it became the new UK incorporated holding company for the business previously held by New World Resources N.V. ('NWR NV'). In accordance with the requirements of International Financial Reporting Standards as adopted by European Union ('adopted IFRS'), the Company's consolidated financial results and financial position prior to 6 May 2011 are those of NWR NV.

The financial information includes New World Resources Plc and its subsidiaries. The Company's significant subsidiaries as at 30 June 2012 are:

* representing 100% ownership by New World Resources N.V.

The objective of the Company is to act as a holding entity for the Group.

See note 'Changes in the consolidated group' on page 19 for information on the comparative period.

All of the Company's consolidated subsidiaries are incorporated in the Czech Republic, with the exception of NWR KARBONIA S.A. ('NWR Karbonia'), which is incorporated in Poland and NWR NV which is incorporated in the Netherlands.

Statement of compliance

The presented financial information is prepared based on the recognition and measurement criteria of adopted IFRS and on the going concern basis that the Directors consider appropriate.

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Company as at and for the year ended 31 December 2011.

Accounting policies

The financial information has been prepared on the basis of accounting policies and methods of compilation consistent with those applied in the annual consolidated financial statements for the year ended 31 December 2011, which are contained within the 2011 Annual Report and Accounts of the Company, which are available on the Group's website at www.newworldresources.eu.

There is one new standard (Amendment to IFRS 7 Financial Instruments: Disclosure) relevant for the Group which is effective from 1 January 2012. This amendment affects disclosure and presentation only and as such is not relevant for interim financial statements and has no impact on the Group's financial position or performance.

Basis of preparation

The financial information is prepared on a historical cost basis, except for derivative and certain other financial instruments, which are stated at fair value. It is presented in Euro (EUR) and is rounded to the nearest thousand. Financial information of operations with functional currency other than EUR was translated to the Group presentation currency (EUR).

EUR is the functional currency of the Company and NWR NV, Polish Zloty (PLN) is the functional currency of NWR Karbonia and Czech Koruna (CZK) is the functional currency of all the remaining consolidated companies in the Group.

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgements made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements of the Company for the year ended 31 December 2011.

Changes in the consolidated group

The changes listed below include all changes in the consolidated group for the period from 1 January 2011 to 30 June 2012.

New subsidiary

A new 100% subsidiary of NWR NV, NWR Communications, s.r.o. was established on 6 June 2011 to perform public relations and corporate communications activities.

Reincorporation

The Company was incorporated on 30 March 2011 as part of a corporate reorganisation under which it became the new UK incorporated holding company for the businesses previously held by NWR NV.

The reorganisation was undertaken by way of an offer by the Company to the shareholders of NWR NV to exchange shares in the Company for their shares in NWR NV on a one-for-one basis. The condition of the offer relating to acceptances was met on 5 May 2011 (the 'first closing date') and the Company became the new holding company when it issued shares to all accepting shareholders of NWR NV on 6 May 2011. At that date the Company held approximately 97.0% of the A shares of NWR NV and 100% of its B shares. Subsequent closings reduced the number of shares of NWR NV that are not held by the Company to approximately 0.2%, representing a non-controlling interest in NWR NV as at 30 June 2012.

The Company is currently in the process of a compulsory squeeze-out under which it intends to acquire the remaining shares in NWR NV. On 19 June 2012, the Enterprise Chamber of the Amsterdam Court of Appeals rendered a judgement in the squeeze-out proceedings in which it ordered the present holders of the remaining outstanding shares in NWR NV to transfer their shares to the Company for a price of EUR 3.96 per share. The Company intends to proceed with the payment of the purchase price to and acquisition of the shares from the remaining shareholders after the period of appeal of three months has lapsed on 19 September 2012. Payment (of approximately EUR 2.3 million) and transfer will take place after said date, provided no appeals have been filed.

The reincorporation did not lead to a change in control and did not result in any changes to the day-to-day operations of the Group.

Non-IFRS Measures

The Company defines EBITDA as net profit before non-controlling interests, income tax, net financial costs, depreciation and amortisation, impairment of property, plant and equipment ('PPE') and gains/losses from sale of PPE. While the amounts included in EBITDA are derived from the Group's financial information, it is not a financial measure determined in accordance with adopted IFRS. Accordingly, EBITDA should not be considered as an alternative to net income or operating income as a sole indication of the Group's performance or as an alternative to cash flows as a measure of the Group's liquidity. The Company currently uses EBITDA in its business operations to, among others, evaluate the performance of its operations, develop budgets, and measure its performance against those budgets. The Company considers EBITDA a useful tool to assist in evaluating performance because it excludes interest, taxes and any non-cash charges.

The Company defines net debt as total debt less cash and cash equivalents. Total debt includes issued bonds, long-term and short-term interest‑bearing loans and borrowings. Total debt is defined as gross amount of debt less related expenses. Interest‑bearing loans, bond issues, and borrowings are measured at amortised cost.

Exchange Rates

The Czech Koruna depreciated (based on the average exchange rate) by 3% between 6M 2012 and the same period of 2011.

Throughout this presentation of the operating results, the financial results and performance compared to the prior period, both in absolute and percentage terms, are expressed in Euros. The Company may also, where deemed relevant, present variances in terms of constant foreign exchange rates, marked ex-FX, which exclude the estimated effect of currency translation differences and are non-IFRS financial measures. The financial information could differ considerably if the financial information was presented in CZK.

Financial Performance

Revenues

Revenues of the Group decreased by 17% to EUR 694,040 thousand in 6M 2012 compared to the same period in 2011.

*For the purpose of this analysis, where the Group sells products on an EXW or similar basis, the notional transport element is shown separately in order to separate the impact of changing transport costs from changes in the underlying achieved price for the products sold.

The decrease in total revenues mainly reflects lower revenues from sales of both coking and thermal coal as well as coke. The decrease in coking coal and coke revenues is attributable mainly to lower realised prices (see Average realised sales prices below), partly offset by higher coking coal sales volumes; and the decrease in thermal coal revenues is attributable to a decrease in sales volumes, partly offset by higher realised prices. The decrease in other revenues is attributable to the negative impact of derivatives used to hedge the currency risk relating to sales denominated in currencies other than CZK.

Total production of coal in 6M 2012 decreased by 1% compared to production volume in the same period of 2011. Coal volumes sold to third parties were lower by 11% as a result of slower thermal coal sales in 6M 2012 partly offset by higher coking coal sales.

* Inventory consists of coal available for immediate sale and coal that has to be converted from raw coal. Opening and closing inventory balances do not always reconcile due to various factors such as production losses. This balance excludes coking coal inventory held by OKK that will be used for coke production and amounted to 9kt (2011: 12kt).

Coal inventories increased by 687kt in 6M 2012 compared to an increase of 113kt in the same period in 2011.

Coke production decreased by 13% in 6M 2012 compared to the same period in 2011, with coke sales lower by 6%, mainly as a result of weak coke demand continuing from the second half of the previous year. Coke inventories remained almost flat in 6M 2012.

Operating Expenses

Total operating expenses, net of other operating income and gain/loss from sale of material and property, plant and equipment ('PPE'), decreased by 4% (2% on constant currency basis) in 6M 2012 compared to the same period in 2011.

Consumption of Material and Energy

The costs for consumption of externally purchased coal for coking operations decreased due to lower prices of coking coal and lower consumed volumes.

Consumption of material and energy, excluding external coal consumption, decreased by 1%, ex-FX, partly due to the 1% reduction in production. A decrease in development works was fully offset with higher input costs per equipped coal panel due to more demanding geological conditions, as the Group mines at greater depths and uses higher grades of steel for reinforcement underground, resulting in almost flat mining material costs on ex-FX basis.

Service Expenses

The reduction in advisory expenses is attributable to one-off expenses related to the reincorporation process incurred during 6M 2011.

The decrease in maintenance costs is attributable to scheduled maintenance of roadways and mining equipment in the previous period.

The slight decrease in contractors' costs is the result of a 3% decrease in the number of shifts, partly offset by a 2% increase in unit costs per shift, ex-FX. Contractor headcount remained almost flat when compared to the previous period.

Personnel Expenses

Total personnel expenses remained flat compared to 6M 2011 on a constant currency basis. Personnel expenses decreased by 4%, ex-FX, mainly as a result of a 1% headcount decrease and lower accrual for bonuses and other allowances. On the other hand, 6M 2011 was positively affected by a change in the employee benefit provision.

In 6M 2012, the average number of employees including contractors decreased by 1% compared to the same period of 2011.

Other Operating Income and Expenses

Other operating income and expenses is composed of insurance costs and payments, provisions for mining damages and indemnity and their release and other fees. Since the amounts within the other operating income are relatively low, they are sensitive to one‑time effects and seasonal fluctuations. Other operating expenses increased in 6M 2012 mainly due to a higher provision for mining damages.

EBITDA

The Group's EBITDA for 6M 2012 decreased by 37% compared to the same period in 2011 mainly as a result of lower revenues from both coking and thermal coal as well as from coke.

As EBITDA is a non-IFRS measure, the following table provides a reconciliation of EBITDA to IFRS line items of the income statement.

Depreciation and amortisation

As the functional currency of the main operating subsidiaries OKD and OKK is CZK, most of the depreciation cost is recorded in this currency. Excluding the impact of changes in the exchange rate, depreciation increased by 1% in 6M 2012compared to the same period in 2011.

Financial Income and Expense

The decrease in net financial expense of 43% in 6M 2012 compared to 2011 is mainly attributable to:

·; a decrease in net foreign exchange loss by EUR 12,266 thousand; and

·; an increase of EUR 8,171 thousand in net profit on revaluation of derivatives for which hedge accounting is not applied.

Profit before Tax

Profit before tax in 6M 2012 was EUR 48,376 thousand, a decrease of EUR 72,110 thousand compared to a profit of EUR 120,486 thousand for the same period of 2011.

Income Tax

The Group recorded a net income tax expense of EUR 13,853 thousand in 6M 2012, compared to a net income tax expense of EUR 33,518 thousand in 6M 2011. The effective tax rate is 29% in 6M 2012 compared to 28% in the same period in 2011.

Profit for the Period

Profit in 6M 2012 was EUR 34,523 thousand, which represents a decrease of EUR 52,445 thousand compared to the profit of EUR 86,968 thousand for the same period of 2011.

Earnings per Share

The calculation of earnings per share was based on profit attributable to the shareholders of the Company and a weighted average number of shares outstanding during the six-month period ended 30 June:

Cash Flow

Cash Flow from Operating Activities

The Group's primary source of cash is its operating activities. Cash generated  from operating activities, after working capital changes and before interest and tax payments in 6M 2012 was EUR 128,528 thousand, which was EUR 62,497 thousand lower than in the same period of 2011, in line with lower EBITDA. 

Cash Flow from Investing Activities

Capital expenditures amounted to EUR 122,686 thousand in 6M 2012, an increase of EUR 17,925 thousand when compared to the same period of 2011. The capital expenditures consist mainly of spending in the Coal segment, including development of new mining areas. 

Cash Flow from Financing Activities

Cash flow from financing activities consisted of repayment of the ECA loan of EUR 7,123 thousand (the same amount was repaid in the comparative period of 2011) and dividend payment of EUR 18,548 thousand to A shareholders (EUR 58,234 thousand to A shareholders and EUR 40,000 thousand to B shareholders in comparative period of 2011).

Liquidity and Capital Resources

The Company is a holding company and relies on dividends or other distributions from subsidiaries, inter-company loans or other capital contributions to fund its liquidity requirements. The liquidity requirements of the Group arise primarily from working capital requirements, interest and principal payments on the bonds, loans and borrowings, dividend payments, the need to fund capital expenditures and, on a selective basis, acquisitions. The dividends, distributions or other payments from subsidiaries are expected to be funded by cash from their operations. The Group continuously reviews its cash flow and operations in order to safeguard the business as a going concern, and believes that the cash generated from its operations and borrowing capacity will be sufficient to meet its principal uses of cash, which include future planned operating expenditures, anticipated capital expenditures (including acquisitions or mining equipment), scheduled debt and interest payments and distributions. To augment the existing cash and liquidity resources, the Company continues to evaluate a range of transactions including debt financing. The Company may consider, from time to time, to carry out transactions to acquire, repay or discharge its outstanding debt (or portions thereof).

As at 30 June 2012, the Group held cash and cash equivalents of EUR 451,849 thousand and had indebtedness of EUR 923,424 thousand, of which EUR 113,878 thousand is contractually repayable in the next 12 months (EUR 114,246 in nominal values). This results in a net debt position for the Group of EUR 471,575 thousand, 18% higher when compared to EUR 400,639 thousand as at 30 June 2011 and 20% higher when compared to 391,467 thousand as at 31 December 2011.

The Indenture governing the 7.375% Senior Notes (the '7.375% Indenture') and the Indenture governing the 7.875% Senior Notes (the '7.875% Indenture') also impose restrictions on the Company's ability to pay dividends. Generally the Company may not pay dividends or make other restricted payments, which exceed, in aggregate, 50% of consolidated net income since 1 April 2007 (as such amounts are accrued on a quarterly basis) plus the net proceeds from the primary tranche of the 2008 IPO and certain other adjustments. The purchase price for investments in entities other than majority owned subsidiaries would also constitute restricted payments. The restricted payment basket as defined by the 7.375% Indenture and the 7.875% Indenture amounted to approximately EUR 118,414 thousand as at 30 June 2012.

The Group is also subject to certain covenants under the ECA loan agreement and the Group was in compliance with those covenants in the reported period.

Segments and Divisions

NWR's business is organised into three segments; Coal, Coke and Real Estate Division ('RED') segment; for which financial and other performance measures are separately available and regularly evaluated by the chief operating decision maker ('CODM'). The CODM is the Board of Directors. These operational segments were identified based on the nature, performance and financial effects of key business activities of the Group.

The Group is further organised into two divisions: the Mining Division ('MD') and the Real Estate Division. The Company had A Shares and B Shares outstanding for the presented periods. The A Shares and B Shares are tracking stocks, which are designed to reflect the financial performance and economic value of the MD and RED, respectively. Due to the public listing of the Company's A shares, the Group provides divisional reporting showing separately the performance of the MD and RED. The main rights, obligations and relations between the RED and MD are covered by Divisional Policy Statement.

The divisional reporting, as such, is essential for the evaluation of the equity attributable to the listed part of the Group. As the operating segments form part of the divisions and in order to provide understandable and useful information, the Company decided to combine the segment and divisional disclosure into one table, with the Coal and Coke segments within Mining division and the RED segment within Real Estate division. The Company's headquarters is included in the other information under the Mining division. The accounting principles of such segment and divisional disclosure are described in NWR's 2011 Annual Report and Accounts.