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UPDATE 1-KGHM ups 2010 profit target by third on strong copper

Published 09/06/2010, 10:45 AM
Updated 09/06/2010, 10:48 AM
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* Ups net profit target to 3.9 billion zlotys

* Raises 2010 sales guidance 23 percent to 14.4 billion zlotys

* Shares gain, outperform market

(Adds detail, background, shares)

By Adrian Krajewski

WARSAW, Sept 6 (Reuters) - KGHM, Europe's No. 2 copper producer, raised its 2010 net profit goal by 35 percent to 3.9 billion zlotys ($1.3 billion), near the high end of expectations thanks largely to resurgent copper prices.

Monday's move was widely expected after the state-controlled miner achieved four fifths of its previous target of 2.9 billion zlotys in the first half. Analysts had predicted a new goal would stand in a 3.4-4.0 billion zloty range.

Last week, a source close to the company told Reuters that KGHM planned to raise its 2010 target by around 30 percent.

KGHM shares rose 1.7 percent to a four-month high, compared with a 0.5 percent gain on Warsaw's main index.

"One has to note that KGHM did not change its 2010 average copper price estimates. They are below the current market price which suggests that the new full-year goal may be surpassed," Ipopema Securities analyst Tomasz Duda said.

KGHM said it still expected copper prices to average $6,700 a tonne this year, while the price closed in on its 4-month high at $7,675 on the London Metal Exchange on Monday.

The group raised its revenue target by 23 percent to 14.4 billion zlotys thanks to higher sale volumes and a weaker than expected Polish currency. KGHM expected the dollar to be worth 3.1 zlotys, compared with the 2.7 zlotys seen previously. (Editing by Dan Lalor)

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