POLISH FINANCIAL SUPERVISION AUTHORITY

Consolidated quarterly report QSr 3 / 2023

(in accordance with § 60 section 2 and § 62 section 1 of the Decree regarding current and periodic information)

for issuers of securities involved in production, construction, trade or services activities

For the third quarter of the financial year 2023 from 1 July 2023 to 30 September 2023 containing the condensed consolidated financial statements prepared under International Accounting Standard 34 in PLN, and condensed financial statements prepared under IAS 34 in PLN.

publication date: 15 November 2023

KGHM Polska Miedź Spółka Akcyjna (name of the issuer)
KGHM Polska Miedź S.A.	Mining
(name of the issuer in brief)	(issuer branch title per the Warsaw Stock
59 – 301	Exchange)
(postal code)	LUBIN
M. Skłodowskiej – Curie	(city)
(street)	48
(48 76) 74 78 200	(number)
(telephone)	(48 76) 74 78 500
[email protected]	(fax)
(e-mail)	www.kghm.com
692–000–00-13	(website address)
(NIP)	390021764
	(REGON)

SELECTED FINANCIAL DATA

data concerning the condensed consolidated financial statements of the KGHM Polska Miedź S.A. Group

	in PLN mn		in EUR mn
	from 1 January 2023 to 30 September 2023	from 1 January 2022 to 30 September 2022	from 1 January 2023 to 30 September 2023	from 1 January 2022 to 30 September 2022
I. Revenues from contracts with customers	25 648	25 696	5 603	5 481
II. Profit on sales	1 089	3 686	238	786
III. Profit before income tax	1 692	6 865	370	1 464
IV. Profit for the period	836	5 267	183	1 123
V. Profit for the period attributable to shareholders of the Parent Entity	828	5 266	181	1 123
VI. Profit for the period attributable to non-controlling interest	8	1	2	-
VII. Other comprehensive income	324	496	70	106
VIII. Total comprehensive income	1 160	5 763	253	1 229
IX. Total comprehensive income attributable to shareholders of the Parent Entity	1 152	5 760	251	1 228
X. Total comprehensive income attributable to non controlling interest	8	3	2	1
XI. Number of shares issued (million)	200	200	200	200
XII. Earnings per ordinary share (PLN/EUR) attributable to shareholders of the Parent Entity	4.14	26.33	0.91	5.62
XIII. Net cash generated from operating activities	3 642	2 158	796	460
XIV. Net cash used in investing activities	( 3 036)	( 1 533)	( 663)	( 327)
XV. Net cash used in financing activities	( 386)	( 326)	( 84)	( 70)
XVI. Total net cash flow	220	299	49	63

	As at 30 September 2023	As at 31 December 2022	As at 30 September 2023	As at 31 December 2022
XVII. Non-current assets	42 213	40 379	9 106	8 610
XVIII. Current assets	13 284	13 065	2 866	2 786
XIX. Total assets	55 497	53 444	11 972	11 396
XX. Non-current liabilities	12 064	12 113	2 602	2 583
XXI. Current liabilities	10 325	9 185	2 227	1 958
XXII. Equity	33 108	32 146	7 143	6 854
XXIII. Equity attributable to shareholders of the Parent Entity	33 041	32 089	7 129	6 842
XXIV. Equity attributable to non-controlling interest	67	57	14	12

data concerning the quarterly financial information of KGHM Polska Miedź S.A.

	in PLN mn		in EUR mn
	from 1 January 2023 to 30 September 2023	from 1 January 2022 to 30 September 2022	from 1 January 2023 to 30 September 2023	from 1 January 2022 to 30 September 2022
I. Revenues from contracts with customers	22 470	21 783	4 909	4 647
II. Profit on sales	1 887	3 373	412	719
III. Profit before income tax	2 640	4 857	577	1 036
IV. Profit for the period	1 737	3 538	379	755
V. Other comprehensive net income	339	348	75	74
VI. Total comprehensive income	2 076	3 886	454	829
VII. Number of shares issued (million)	200	200	200	200
VIII. Earnings per ordinary share (PLN/EUR)	8.69	17.69	1.90	3.78
IX. Net cash generated from operating activities	3 525	1 721	770	367
X. Net cash used in investing activities	( 3 043)	( 953)	( 665)	( 203)
XI. Net cash used in financing activities	( 386)	( 397)	( 84)	( 85)
XII. Total net cash flow	96	371	21	79

		As at 30 September 2023	As at 31 December 2022	As at 30 September 2023	As at 31 December 2022
	XIII. Non-current assets	39 081	36 707	8 431	7 827
XIV. Current assets		11 986	11 288	2 586	2 407
XV. Total assets		51 067	47 995	11 017	10 234
	XVI. Non-current liabilities	10 383	10 311	2 240	2 199
	XVII. Current liabilities	9 133	8 009	1 970	1 708
XVIII. Equity		31 551	29 675	6 807	6 327

Table of contents
Part 1 – Condensed consolidated financial statements	3
CONSOLIDATED STATEMENT OF PROFIT OR LOSS	3
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	4
CONSOLIDATED STATEMENT OF CASH FLOWS	5
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	6
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	7
1 – General information	8
Note 1.1 Corporate information	8
Note 1.2 Structure of the Group	9
Note 1.3 Exchange rates applied	11
Note 1.4 Accounting policies and the impact of new and amended standards and interpretations	11
2 – Realisation of strategy	13
Note 2.1 Development directions of the Group	13
Note 2.2 Key achievements in the implementation of the Strategy	13
3 – Information on operating segments and revenues	15
Note 3.1 Operating segments	15
Note 3.2 Financial results of reporting segments	18
Note 3.3 Revenues from contracts with customers of the Group – breakdown by products	21
Note 3.4 Revenues from contracts with customers of the Group – breakdown by type of contract	23
Note 3.5 Revenues from contracts with customers of the Group – geographical breakdown reflecting the location of
end clients	25
Note 3.6 Main customers	26
Note 3.7 Non-current assets – geographical breakdown	26
Note 3.8 Information on segments' results	27
4 – Selected additional explanatory notes	37
Note 4.1 Expenses by nature	37
Note 4.2 Other operating income and (costs)	38
Note 4.3 Finance income and (costs)	39
Note 4.4 Reconciliation of effective tax rate	39
Note 4.5 Information on property, plant and equipment and intangible assets	40
Note 4.6 Involvement in joint ventures	41
Note 4.7 Financial instruments	43
Note 4.8 Commodity, currency and interest rate risk management	48
Note 4.9 Liquidity risk and capital management	52
Note 4.10 Related party transactions	55
Note 4.11 Assets and liabilities not recognised in the statement of financial position	57
Note 4.12 Changes in working capital	57
Note 4.13 Assets held for sale (disposal group) and liabilities associated with them	58
Note 4.14 Other liabilities	59
5 – Additional information to the consolidated quarterly report Note 5.1 Effect of changes in the organisational structure of the Group	60 60
Note 5.2 Seasonal or cyclical activities	60
Note 5.3 Information on the issuance, redemption and repayment of debt and equity securities	60
Note 5.4 Information related to a paid (declared) dividend, total and per share	60
Note 5.5 Other information to the consolidated quarterly report	61
Note 5.6 Assessment of the risk of impairment of assets of the Group in the context of the market capitalisation of the
Company	63
Note 5.7 Impact of the war in Ukraine on the operations of the Company and the Group	64
Note 5.8 Subsequent events	66
Part 2 - Quarterly financial information of KGHM Polska Miedź S.A.	67
SEPARATE STATEMENT OF PROFIT OR LOSS	67
SEPARATE STATEMENT OF COMPREHENSIVE INCOME	68
SEPARATE STATEMENT OF CASH FLOWS	69
SEPARATE STATEMENT OF FINANCIAL POSITION	70
SEPARATE STATEMENT OF CHANGES IN EQUITY	71
Explanatory notes	72
Note 1 Revenues from contracts with customers – geographical breakdown reflecting the location of end customers72
Note 2 Expenses by nature	73
Note 3 Other operating income and (costs)	74
Note 4 Finance income and (costs)	75
Note 5 Changes in working capital	75
Note 6 Other adjustments in the statement of cash flows	76

Part 1 – Condensed consolidated financial statements

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

		from 1 July 2023 to 30 September 2023	from 1 January 2023 to 30 September 2023	from 1 July 2022 to 30 September 2022	from 1 January 2022 to 30 September 2022
Note 3.3	Revenues from contracts with customers	7 891	25 648	7 770	25 696
Note 4.1	Cost of sales	(7 225)	(23 154)	(6 611)	(20 643)
	Gross profit	666	2 494	1 159	5 053
Note 4.1	Selling costs and administrative expenses	( 472)	(1 405)	( 504)	(1 367)
	Profit on sales	194	1 089	655	3 686
Note 4.6	Gain due to the reversal of allowances for impairment of loans granted to a joint venture	11	493	-	783
Note 4.6	Interest income on loans granted to a joint venture calculated using the effective interest rate method	154	446	158	477
	Profit or loss on involvement in a joint venture	165	939	158	1 260
Note 4.2	Other operating income, including:	1 033	702	1 428	3 376
	other interest calculated using the effective interest rate method	21	44	15	41
	reversal of impairment losses on financial instruments	-	3	1	4
Note 4.2	Other operating costs, including:	( 336)	( 954)	( 353)	( 762)
	impairment losses on financial instruments	( 1)	( 6)	( 2)	( 5)
Note 4.3	Finance income	( 32)	138	2	49
Note 4.3	Finance costs	( 235)	( 222)	( 339)	( 744)
	Profit before income tax	789	1 692	1 551	6 865
	Income tax expense	( 354)	( 856)	( 464)	(1 598)
	PROFIT FOR THE PERIOD	435	836	1 087	5 267
	Profit for the period attributable to:
	Shareholders of the Parent Entity	434	828	1 086	5 266
	Non-controlling interest	1	8	1	1
	Weighted average number of ordinary shares (million)	200	200	200	200
	Basic/diluted earnings per share (in PLN)	2.17	4.14	5.43	26.33

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	from 1 July 2023 to 30 September 2023	from 1 January 2023 to 30 September 2023	from 1 July 2022 to 30 September 2022	from 1 January 2022 to 30 September 2022
Profit for the period	435	836	1 087	5 267
Measurement and settlement of hedging instruments net of the tax effect	( 283)	232	( 197)	714
Exchange differences from the translation of statements of operations with a functional currency other than PLN	94	6	120	118
Other comprehensive income which will be reclassified to profit or loss	( 189)	238	( 77)	832
Measurement of equity financial instruments at fair value through other comprehensive income, net of the tax effect	123	215	( 218)	( 94)
Actuarial gains/(losses) net of the tax effect	( 51)	( 129)	( 172)	( 242)
Other comprehensive income, which will not be reclassified to profit or loss	72	86	( 390)	( 336)
Total other comprehensive net income	( 117)	324	( 467)	496
TOTAL COMPREHENSIVE INCOME	318	1 160	620	5 763
Total comprehensive income attributable to:
Shareholders of the Parent Entity	316	1 152	619	5 760
Non-controlling interest	2	8	1	3

CONSOLIDATED STATEMENT OF CASH FLOWS

		from 1 January 2023 to 30 September 2023	from 1 January 2022 to 30 September 2022
	Cash flow from operating activities
	Profit before income tax	1 692	6 865
	Depreciation/amortisation recognised in profit or loss	1 691	1 605
	Gain due to the reversal of allowances for impairment of loans granted to a joint venture	( 493)	( 783)
	Interest on loans granted to a joint venture	( 446)	( 477)
	Other interest	52	38
	Impairment losses on property, plant and equipment and intangible assets	10	53
	Other gains due to the reversal of impairment losses on non-current assets	( 32)	( 1)
	Losses/(Gains) on disposal of property, plant and equipment and intangible assets	11	( 126)
	Gain on disposal of subsidiaries	( 1)	( 173)
	Exchange differences, of which:	38	(1 621)
	from investing activities and on cash	89	(2 234)
	from financing activities	( 51)	613
	Change in provisions for decommissioning of mines, liabilities related to
	future employee benefits programs and other provisions	280	( 39)
	Change in other receivables and liabilities other than working capital	( 150)	( 254)
	Change in assets and liabilities due to derivatives	728	( 404)
	Reclassification of other comprehensive income to profit or loss due to the realisation of derivative hedging instruments	( 167)	474
	Other adjustments	45	8
	Exclusions of income and costs, total	1 566	(1 700)
	Income tax paid	(1 324)	(1 491)
Note 4.12	Changes in working capital, including:	1 708	(1 516)
	change in trade payables transferred to factoring	1 949	( 53)

	Net cash generated from operating activities	3 642	2 158
	Cash flow from investing activities
	Expenditures on mining and metallurgical assets, including:	(2 653)	(2 622)
	paid capitalised interest on borrowings together with proceeds from the settlement of an instrument hedging interest rate of bonds	( 172)	( 132)
	Expenditures on other property, plant and equipment and intangible assets	( 386)	( 334)
	Expenditures on financial assets designated for decommissioning of mines and other technological facilities	( 36)	-
	Advances granted on property, plant and equipment and intangible assets	( 12)	( 10)
	Advances granted for the purchase of financial instruments	( 141)	-
	Proceeds from financial assets designated for decommissioning of mines and other technological facilities	2	31
	Proceeds from repayment of loans granted to a joint venture	28	358
	Proceeds from disposal of property, plant and equipment and intangible assets	33	376
	Proceeds from disposal of subsidiaries	1	243
	Interest received on loans granted to a joint venture	135	431
	Other	( 7)	( 6)
	Net cash used in investing activities	(3 036)	(1 533)
	Cash flow from financing activities
Note 4.9	Proceeds from borrowings	1 660	674
	Proceeds from derivatives related to sources of external financing	35	42
Note 4.9	Repayment of borrowings	(1 731)	( 312)
Note 4.9	Repayment of lease liabilities	( 70)	( 51)
	Expenditures due to derivatives related to sources of external financing	( 41)	( 45)
	Interest paid, including:	( 43)	( 45)
Note 4.9	borrowings	( 27)	( 43)
	Expenditures due to dividends paid to shareholders of the Parent Entity	( 200)	( 600)
	Other	4	11
	Net cash used in financing activities	( 386)	( 326)
	NET CASH FLOW	220	299
	Exchange gains/(losses)	( 17)	( 71)
	Cash and cash equivalents at beginning of the period	1 200	1 904

	Cash and cash equivalents at end of the period, including:	1 403	2 132
	restricted cash	27	17

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		As at 30 September 2023	As at 31 December 2022
	ASSETS
	Mining and metallurgical property, plant and equipment	23 692	22 894
	Mining and metallurgical intangible assets	3 081	2 772
	Mining and metallurgical property, plant and equipment and intangible assets	26 773	25 666
	Other property, plant and equipment	2 812	2 746
	Other intangible assets	224	218
	Other property, plant and equipment and intangible assets	3 036	2 964
Note 4.6	Involvement in joint ventures – loans granted	10 349	9 603
	Derivatives	324	714
	Other financial instruments measured at fair value	875	606
	Other financial instruments measured at amortised cost	486	469
Note 4.7	Financial instruments, total	1 685	1 789
	Deferred tax assets	138	137
	Other non-financial assets	232	220
	Non-current assets	42 213	40 379
	Inventories	8 783	8 902
Note 4.7	Trade receivables, including:	1 513	1 177
	trade receivables measured at fair value through profit or loss	993	751
	Tax assets	324	367
Note 4.7	Derivatives	439	796
Note 4.7	Other financial assets	259	337
	Other non-financial assets	563	286
Note 4.7	Cash and cash equivalents	1 403	1 200
	Current assets	13 284	13 065
	TOTAL ASSETS	55 497	53 444
	EQUITY AND LIABILITIES
	Share capital	2 000	2 000
	Other reserves from measurement of financial instruments	20	( 427)
	Accumulated other comprehensive income, other than from measurement of financial instruments	1 689	1 812
	Retained earnings	29 332	28 704

	Equity attributable to shareholders of the Parent Entity Equity attributable to non-controlling interest	33 041 67	32 089 57
	Equity	33 108	32 146
Note 4.7	Borrowings, lease and debt securities	5 363	5 220
Note 4.7	Derivatives	384	719
	Employee benefits liabilities	2 896	2 621
	Provisions for decommissioning costs of mines and other	1 672	1 859
	technological facilities
	Deferred tax liabilities	1 281	1 151
Note 4.14	Other liabilities	468	543
	Non-current liabilities	12 064	12 113
Note 4.7	Borrowings, lease and debt securities	1 041	1 223
Note 4.7	Derivatives	296	434
Note 4.7	Trade and similar payables	5 033	3 094
	Employee benefits liabilities	1 669	1 699
	Tax liabilities	649	1 233
	Provisions for liabilities and other charges	179	173
Note 4.14	Other liabilities Current liabilities	1 458 10 325	1 329 9 185
	Non-current and current liabilities	22 389	21 298
	TOTAL EQUITY AND LIABILITIES	55 497	53 444

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Equity attributable to shareholders of the Parent Entity
	Share capital	Other reserves from measurement of financial instruments	Accumulated other comprehensive income	Retained earnings	Total	Equity attributable to non-controlling interest	Total equity
As at 1 January 2022	2 000	(1 705)	2 219	24 532	27 046	92	27 138
Transactions with owners - dividend	-	-	-	( 600)	( 600)	-	( 600)
Profit for the period	-	-	-	5 266	5 266	1	5 267
Other comprehensive income	-	620	( 126)	-	494	2	496
Total comprehensive income	-	620	( 126)	5 266	5 760	3	5 763
Changes due to loss of control of subsidiaries	-	-	-	-	-	( 37)	( 37)
As at 30 September 2022	2 000	(1 085)	2 093	29 198	32 206	58	32 264
As at 1 January 2023	2 000	( 427)	1 812	28 704	32 089	57	32 146
Transactions with non-controlling interest	-	-	-	-	-	2	2
Transactions with owners - dividend	-	-	-	( 200)	( 200)	-	( 200)
Profit for the period	-	-	-	828	828	8	836
Other comprehensive income	-	447	( 123)	-	324	-	324
Total comprehensive income	-	447	( 123)	828	1 152	8	1 160
As at 30 September 2023	2 000	20	1 689	29 332	33 041	67	33 108

1 – General information

Note 1.1 Corporate information

KGHM Polska Miedź S.A. ("the Parent Entity", "the Company") with its registered office in Lubin at 48 M.Skłodowskiej-Curie Street is a joint stock company registered at the Regional Court for Wrocław Fabryczna, Section IX (Economic) of the National Court Register, entry no. KRS 23302, on the territory of the Republic of Poland.

KGHM Polska Miedź S.A. has a multi-divisional organisational structure, comprised of a Head Office and 10 divisions: 3 mines (Lubin Mine Division, Polkowice-Sieroszowice Mine Division, Rudna Mine Division), 3 metallurgical plants (Głogów Smelter/Refinery, Legnica Smelter/Refinery, Cedynia Wire Rod Division), the Concentrator Division, the Tailings Division, the Mine-Smelter Emergency Rescue Division and the Data Centre Division.

The shares of KGHM Polska Miedź S.A. are listed on the Warsaw Stock Exchange.

The Parent Entity's principal activities include:

− the mining of copper and non-ferrous metals ores, and
− the production of copper, precious and non-ferrous metals.

The business activities of the Group include:

− the mining of copper and non-ferrous metals ores.
− the mined production of metals, including copper, nickel, silver, gold, platinum, palladium,
− the production of goods from copper and precious metals,
− underground construction services,
− the production of machinery and mining equipment,
− transport services,
− services in the areas of research, analysis and design,
− the production of road-building materials, and
− the recovery of associated metals from copper ore.

The KGHM Polska Miedź S.A. Group ("the Group") carries out exploration for and mining of copper, nickel and precious metals based on concessions for Polish deposits held by KGHM Polska Miedź S.A., and also based on legal titles held by companies of the KGHM INTERNATIONAL LTD. Group for the exploration for and mining of these resources in the USA, Canada, and Chile.

Impact of the threat of a COVID-19 pandemic on sales markets

Noticeable economic slowdown in the third quarter of 2023, following the shock caused by the Covid-19 pandemic, still affects the level of Chinese international commercial trade (decrease in export and import as compared to the corresponding period of 2022). Nonetheless, while observing the current situation, the Parent Entity is not experiencing a substantial threat to its on-going operations related to the situation on the Chinese market. The Parent Entity continuously monitors the global economic situation, including the Chinese market, to assess its potential negative impact on the KGHM Polska Miedź S.A. Group and to take pre-emptive actions to mitigate this impact.

The impact of the war in Ukraine on individual aspects of the business and the lack of its impact as well as the going concern assumption are described in Note 5.7.

Note 1.2 Structure of the Group

As at 30 September 2023, KGHM Polska Miedź S.A. consolidated 61 subsidiaries and used the equity method to account for the shares of two joint ventures (Sierra Gorda S.C.M. and NANO CARBON Sp. z o.o. in liquidation).

* An entity excluded from consolidation due to immaterial impact on the consolidated financial statements

Note 1.3 Exchange rates applied

The following exchange rates were applied in the conversion to EUR of selected financial data:

for the conversion of turnover, profit or loss and cash flow for the current period, the rate of 4.5773 EURPLN*,
for the conversion of turnover, profit or loss and cash flow for the comparable period, the rate of 4.6880 EURPLN*,
for the conversion of assets, equity and liabilities at 30 September 2023, the current average exchange rate announced by the National Bank of Poland (NBP) as at 29 September 2023, of 4.6356 EURPLN,
for the conversion of assets, equity and liabilities at 31 December 2022, the current average exchange rate announced by the NBP as at 30 December 2022, of 4.6899 EURPLN.

*the rates represent the arithmetic average of current average exchange rates announced by the NBP on the last day of each month during the period from January to September respectively of 2023 and 2022.

Note 1.4 Accounting policies and the impact of new and amended standards and interpretations

The following quarterly report includes:

1. the condensed consolidated financial statements of the KGHM Polska Miedź S.A. Group for the period from 1 January to 30 September 2023 and the comparable period from 1 January to 30 September 2022, together with selected explanatory information (Part 1),
1. the quarterly financial information of KGHM Polska Miedź S.A. for the period from 1 January to 30 September 2023 and the comparable period from 1 January to 30 September 2022 (Part 2).

Neither the condensed consolidated financial statements for the period from 1 January to 30 September 2023 and as at 30 September 2023 nor the quarterly financial information of KGHM Polska Miedź S.A. for the period from 1 January to 30 September 2023 and as at 30 September 2023 were subject to audit by a certified auditor.

The consolidated quarterly report for the period from 1 January 2023 to 30 September 2023 was prepared in accordance with IAS 34 Interim Financial Reporting as approved by the European Union and for a full understanding of the financial position and operating results of KGHM Polska Miedź S.A. and the KGHM Polska Miedź S.A. Group, should be read jointly with the Annual Report RR 2022 and the Consolidated annual report SRR 2022.

This quarterly report's financial statements were prepared using the same accounting policies and valuation methods for the current and comparable periods and principles applied in annual financial statements (consolidated and separate), prepared as at 31 December 2022.

Note 1.4.1 Impact of new and amended standards and interpretations

From 1 January 2023, the Group is bound by:

IFRS 17 Insurance contracts and amendments to IFRS 17 published in 2020 and 2021,
Amendments to IAS 1 and Practice Statement 2 on disclosures of accounting policies,
Amendments to IAS 8 on the introduction of a definition of accounting estimates,
Amendments to IAS 12 on deferred tax related to assets and liabilities arising from a single transaction,
Amendments to IAS 12 on temporary exception to the requirements regarding recognition of deferred tax related to the implementation of the reform of the international tax system (the so-called pillar two, BEPS 2.0 (Base Erosion and Profit Shifting 2.0)).

Up to the date of publication of these condensed consolidated financial statements, the aforementioned amendments to the standards were adopted for use by the European Union. The Group will implement these amendments within the date of their first mandatory application, however in the Group's opinion IFRS 17 will not have an impact on its consolidated financial statements, and the impact of other amendments will not be significant. In particular, the Group applied an approach in accordance with the amended guidelines with respect to amendments to IAS 12 on recognition of deferred tax related to assets and liabilities arising from a single transaction (e.g. lease agreements capitalised by lessee pursuant to IFRS 16 and environmental provisions recognised pursuant to IFRIC 1).

Impact of the international tax system reform

Pillar 2 of the BEPS 2.0 project introduces a general framework of the global minimum tax, adopted during the forum of the Organisation for Economic Cooperation and Development (OECD, hereafter: OECD Framework). In the case of member states of the European Union, the first stage of implementation of new rules will be the adoption of the Council Directive (EU) 2022/2523 of 14 December 2022 – Directive on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the European Union. The Directive obliges the individual member states to implement rules of the Directive to their domestic legal systems, in accordance with legislative rules in force in individual states.

In the case of Poland, appropriate domestic laws have not yet been adopted, nor has draft legislation, which will directly impose duties on the obliged entities, been released to the public. The analysis of the OECD Framework and the Directive leads to the conclusion that KGHM Polska Miedź S.A., as a so-called MNE (multinational enterprise), will be obliged to report a specific level of the tax rate of subsidiaries at the level of individual jurisdictions.

Nevertheless, implementation of an appropriate legal framework at the domestic level is necessary in this regard. While the rules of the Directive should encompass the year 2024, the OECD Framework includes a transitional period, which postpones the obligations in this regard by 3 subsequent years. Based on analysis of the assumptions stipulated in these transitional rules, it is expected that the Group will be able to use them in the majority of jurisdictions.

Due to the above, since there is no legal framework in force on the reform of pillar 2 of the BEPS 2.0 project, these interim consolidated financial statements do not contain any amounts arising from the reform of the international tax system.

The Group will continuously monitor progress of the legislative work aimed at implementation of the rules of the reform of pillar 2 of the BEPS 2.0 project, in Poland as well as in other jurisdictions in which subsidiaries of the Group operate and will analyse their potential impact on the Group.

2 – Realisation of strategy

Note 2.1 Development directions of the Group

Policy regarding the development directions of the Group

During the reporting period being discussed, policy regarding the development directions of the KGHM Polska Miedź S.A. Group was continued. Further actions were also taken aimed at adapting the Group's organisational functioning model to the business model of KGHM Polska Miedź S.A. and the market environment. In terms of the domestic companies, development policy was also aimed at cooperation between the Group's entities.

Intentions regarding equity investments

In the case of the companies in Poland, the primary development goal was to ensure continuity and safe working conditions in the core business of KGHM Polska Miedź S.A. and at integrating the Group around the idea of sustainable development, including the implementation of development initiatives under the Circular Economy aimed at limiting the environmental footprint. As regards the international part of the Group, the Company was focused on maximising the value of the portfolio of assets owned.

Investment goals

Investment projects planned and approved for advancement in 2023 supported the achievement of strategic goals in all areas of the Strategy. Maintaining cost-effective domestic production was possible by continuing and bringing into operation key investments, such as:

− outfitting the mines along with the construction of conveyor belts,
− replacement of mining machinery,
− construction of mine de-watering systems,
− construction of air cooling systems,
− construction of the Tailings Segregation and Compacting Station at the Żelazny Most Tailings Storage Facility,
− modernisation and renovation during the maintenance shutdown of the Legnica Copper Smelter and Refinery.

Taking into consideration the development of KGHM Polska Miedź S.A. by enhancing the efficiency and flexibility of the Group in terms of its Polish assets, the following investments were advanced:

− the Deposit Access Program (Deep Głogów along with access and development tunnels),
− exploring for and evaluating deposits in areas under exploration concessions,
− development of the Żelazny Most Tailings Storage Facility above a crown height of 195 m a.s.l.,
− project documentation for the Hybrid Legnica Smelter and Refinery,
− work on the realisation of photovoltaic power plants.

Note 2.2 Key achievements in the implementation of the Strategy

In the third quarter of 2023, KGHM Polska Miedź S.A. continued actions aimed at maintaining stable production in its domestic and international assets, and a level of costs guaranteeing financial security while ensuring safe working conditions and minimising its impact on the environment and surroundings, pursuant to the idea of sustainable development. The Company advanced a variety of initiatives and strategic programs which are crucial to ensuring the continuity of its operations and development.

Flexibility	▪ Continuation of the Hybrid Legnica Smelter and Refinery Strategic Program (including advancement of the concept for the Legnica Smelter and Refinery Scrap Turnover Base). ▪ Continuation of actions to extend the value chain of the Company. ▪ Continuation of exploration projects in Poland with respect to exploring for and evaluating copper ore and other deposits. ▪ Continuation of development projects in the international assets. ▪ Focus on financial stability: basing the Group's financing structure on long-term instruments, shortening the cash conversion cycle, management of market and credit risk in the Group.
Efficiency	▪ Production of copper from the domestic assets (mined - 341 thousand tonnes; metallurgical – 443.5 thousand tonnes). ▪ Production of payable copper from the international assets (Sierra Gorda 59.7 thousand tonnes (55%); Robinson 17.3 thousand tonnes; Carlota 2.9 thousand tonnes; the Sudbury Basin 3.9 thousand tonnes). The Sierra Gorda mine continues to operate exclusively on power provided by RES. ▪ Continuation of the Deposit Access Program – in terms of construction of the GG-1 shaft, an environmental decision was received for the target facilities of the GG-1 shaft and development of the Surface-based Air Conditioning Station. By the end of the third quarter of 2023, 28.6 kilometres of tunnelling had been excavated in the Rudna and Polkowice-Sieroszowice mines. All of the work carried out under the Mine Projects Group enables the successive opening of new mining areas. ▪ Continued development of the Żelazny Most Tailings Storage Facility (development of the Southern Quarter and of the Tailings Segregation and Compacting Station continues to be advanced). Tailings are being deposited in the Southern Quarter along with the raising of the dams. ▪ Exploration projects in Poland (concessions involving exploring for and evaluating copper ore deposits) as well as other concessions involving exploration and evaluation, including the Puck project. ▪ R&D initiatives are underway to enhance the efficiency of the Company's core production business. ▪ Advancement of actions involving intellectual property of the Company.
Ecology, safety and sustainable development	▪ Completion on 31 August 2023, in accordance with the plan, of the Program to adapt the technological installations of the Company to the requirements of BAT conclusions for the nonferrous metals industry and to restrict emissions of arsenic (BATAs). The Program's goal was accomplished - achievement of a modern environmental protection infrastructure at the Głogów Copper Smelter and Refinery and the Legnica Copper Smelter and Refinery, adapted to BAT conclusions and with minimal environmental impact, as well as achievement of a substantial reduction in arsenic emissions. ▪ Advancement of work involving the Environmental Policy and pro-environmental activities, including: Scope 3 greenhouse gas emissions by the Group in 2022 were calculated. ▪ The Cedynia Wire Rod Plant was granted the prestigious certificate and the right to use The Copper Mark trademark. ▪ On 10 July 2023 (for another year in a row) the LBMA (London Bullion Market Association) certificate was granted for responsible silver production in 2022. ▪ The second edition of the Environmental Policy of KGHM Polska Miedź S.A. was published on 12 July 2023. ▪ Continuation of the Occupational Health and Safety Improvement Program (LTIFR: 4.79; TRIR: 0.37).
E- industry	▪ Continuation of projects to automate the production lines of the Mining Divisions of the Company (including, among others, initiatives connected with testing electric and battery-powered mining machinery). ▪ Continuation of digital transformation under the KGHM 4.0. Program.
Energy	▪ On 12 September 2023 a preliminary, contingent agreement was signed for the purchase of shares in special purpose companies, the owners of photovoltaic farm projects with a combined capacity of approx. 47 MW. On 10 October 2023, KGHM Polska Miedź S.A. became the owner of the Żuki PV farm with a capacity of 5.2 MW (details in Note 5.8 Subsequent events). Moreover, the Supervisory Board of the Company consented to the acquisition of 100% of the shares of a special purpose company which owns a photovoltaic power plants project with a capacity of approx. 20 MW. ▪ Continued cooperation with the supplier of SMR technology, the company NuScale Power, LCC, under a preliminary works agreement. On 12 July 2023 a foundational decision was issued by the Minister of Climate and the Environment to KGHM Polska Miedź S.A. for the project to build a small nuclear power plant utilizing the SMR technology. Additionally, work continued on a detailed analysis of sites for the SMR installation under stage II of the preparation of a preliminary site analysis report. ▪ Advancement of projects involving the construction of PV farms on own terrain, and commencement of the review of possibilities of advancing on-shore wind farms. ▪ 16.89% of the Company's need for electricity was met by its own internal sources, including RES, in the first three quarters of 2023.

3 – Information on operating segments and revenues

Note 3.1 Operating segments

The operating segments identified in the KGHM Polska Miedź S.A. Group reflect the structure of the Group, the manner in which the Group and its individual entities are managed and the regular reporting to the Parent Entity's Management Board.

As a result of the aggregation of operating segments and taking into account the criteria stipulated in IFRS 8, the following reporting segments are currently identified within the KGHM Polska Miedź S.A. Group:

Operating segments aggregated in Reporting segment a given reporting segment		Indications of similarity of economic characteristics of segments, taken into account in aggregations
KGHM Polska Miedź S.A. KGHM Polska Miedź S.A.		Not applicable (it is a single operating and reporting segment)
KGHM INTERNATIONAL LTD.	Companies of the KGHM INTERNATIONAL LTD. Group, in which the following mines, deposits or mining areas and mining enterprises constitute operating segments: Sudbury Basin, Robinson, Carlota, DMC, Victoria and Ajax projects.	Operating segments within the KGHM INTERNATIONAL LTD. Group are located in North and South America. The Management Board analyses the results of the following operating segments: Sudbury Basin, Robinson, Carlota, Victoria and Ajax projects and other. Moreover, it receives and analyses reports of the whole KGHM INTERNATIONAL LTD. Group. Operating segments are engaged in the exploration and mining of copper, molybdenum, silver, gold, nickel, platinum and palladium deposits. The operating segments were aggregated based on the similarity of long term margins achieved by individual segments, and the similarity of products, processes and production methods.
Sierra Gorda S.C.M.	Sierra Gorda S.C.M. (joint venture)	Not applicable (it is a single operating and reporting segment)
Other segments	This item includes other Group companies (every individual company is a separate operating segment).	Aggregation was carried out as a result of not meeting the criteria necessitating the identification of a separate additional reporting segment.

The following companies were not included in any of the aforementioned segments:

Future 1 Sp. z o.o., which acts as a holding company with respect to the KGHM INTERNATIONAL LTD. Group,
Future 3 Sp. z o.o., Future 4 Sp. z o.o. and Future 5 Sp. z o.o., which operate in the structure related to the establishment of a Tax Group.

These companies do not conduct operating activities which could impact the results achieved by individual segments, and as a result their inclusion could distort the data presented in this part of the consolidated financial statements due to significant settlements with other Group companies.

Each of the segments KGHM Polska Miedź S.A., KGHM INTERNATIONAL LTD. and Sierra Gorda S.C.M. have their own Management Boards, which report the results of their business activities to the Management Board of the Parent Entity.

The segment KGHM Polska Miedź S.A. is composed only of the Parent Entity, and the segment Sierra Gorda S.C.M. is composed only of the joint venture Sierra Gorda S.C.M. Other companies of the KGHM Polska Miedź S.A. Group are presented below by segment: KGHM INTERNATIONAL LTD. and Other segments.

THE SEGMENT KGHM INTERNATIONAL LTD.
Location	Company
The United States of America	Carlota Copper Company, Carlota Holdings Company, DMC Mining Services Corporation, FNX Mining Company USA Inc., Robinson Holdings (USA) Ltd., Robinson Nevada Mining Company, Wendover Bulk Transhipment Company
Chile	Aguas de la Sierra Limitada, Minera Carrizalillo SpA, KGHM Chile SpA, Quadra FNX Holdings Chile Limitada, DMC Mining Services Chile SpA
Canada	KGHM INTERNATIONAL LTD., 0899196 B.C. Ltd., Centenario Holdings Ltd., DMC Mining Services Ltd., FNX Mining Company Inc., FRANKE HOLDINGS LTD., KGHM AJAX MINING INC., KGHMI HOLDINGS LTD., Quadra FNX Holdings Partnership, Sugarloaf Ranches Ltd.
Mexico	DMC Mining Services Mexico, S.A. de C.V.
Colombia	DMC Mining Services Colombia SAS
The United Kingdom	DMC Mining Services (UK) Ltd.
Luxembourg	Quadra FNX FFI S.à r.l.

OTHER SEGMENTS
Type of activity	Company
Support of the core business	BIPROMET S.A., CBJ sp. z o.o., "Energetyka" sp. z o.o., INOVA Spółka z o.o., KGHM CUPRUM sp. z o.o. – CBR, KGHM ZANAM S.A., KGHM Metraco S.A., PeBeKa S.A., POL-MIEDŹ TRANS Sp. z o.o., WPEC w Legnicy S.A.
Sanatorium-healing and hotel services	Uzdrowiska Kłodzkie S.A. - Grupa PGU, Uzdrowisko Cieplice Sp. z o.o. - Grupa PGU, Uzdrowisko Połczyn Grupa PGU S.A., Uzdrowisko Świeradów - Czerniawa Sp. z o.o. – Grupa PGU
Investment funds, financing activities	Fundusz Hotele 01 Sp. z o.o., Fundusz Hotele 01 Sp. z o.o. S.K.A., KGHM TFI S.A., Polska Grupa Uzdrowisk sp. z o.o.*
Other activities	CENTROZŁOM WROCŁAW S.A., CUPRUM Development sp. z o.o., CUPRUM Zdrowie sp. z o.o.**, KGHM (SHANGHAI) COPPER TRADING CO., LTD., KGHM Kupfer AG, MERCUS Logistyka sp. z o.o., MIEDZIOWE CENTRUM ZDROWIA S.A., NITROERG S.A., NITROERG SERWIS Sp. z o.o., PHU "Lubinpex" Sp. z o.o., PMT Linie Kolejowe Sp. z o.o., WMN "ŁABĘDY" S.A., Zagłębie Lubin S.A., OOO ZANAM VOSTOK, KGHM Centrum Analityki Sp. z o.o.

* Entity sold on 3 August 2023 (Note 5.1).

** Entities merged on 1 August 2023 (Note 5.1).

The Parent Entity and the KGHM INTERNATIONAL LTD. Group (a subgroup) have a fundamental impact on the assets and the generation of revenues in the KGHM Polska Miedź S.A. Group. The activities of KGHM Polska Miedź S.A. are concentrated on the mining industry in Poland, while those of the KGHM INTERNATIONAL LTD. Group are concentrated on the mining industry in the countries of North and South America. The profile of activities of the majority of the remaining subsidiaries of the KGHM Polska Miedź S.A. Group differs from the main profile of the Parent Entity's activities.

The Parent Entity's Management Board monitors the operating results of individual segments in order to make decisions on allocating the Group's resources and assess the financial results achieved.

Financial data prepared for management reporting purposes is based on the same accounting policies as those applied when preparing the consolidated financial statements of the Group, while the financial data of individual reporting segments constitutes the amounts presented in appropriate financial statements prior to consolidation adjustments at the level of the KGHM Polska Miedź S.A. Group, i.e.:

The segment KGHM Polska Miedź S.A. comprises data from the separate financial statements of the Parent Entity prepared in accordance with IFRSs. In the separate financial statements, interest in subsidiaries (including indirect interest in KGHM INTERNATIONAL LTD.) are measured at cost, including the impairment losses,
The segment KGHM INTERNATIONAL LTD. comprises consolidated data of the KGHM INTERNATIONAL LTD. Group prepared in accordance with IFRSs. The involvement in Sierra Gorda S.C.M. is accounted for using the equity method,
The segment Sierra Gorda S.C.M comprises the 55% share of assets, liabilities, revenues and costs of this venture presented in the separate financial statements of Sierra Gorda S.C.M. prepared in accordance with IFRSs,
Other segments comprises aggregated data of individual subsidiaries after excluding transactions and balances between them.

The Management Board of the Parent Entity assesses performance of segments on the basis of adjusted EBITDA and the profit or loss for the period.

The Group defines adjusted EBITDA as profit/loss for the period pursuant to IFRS, excluding taxes (current and deferred income tax as well as the mining tax), finance income and costs, other operating income and costs, profit or loss on involvement in joint ventures, depreciation/amortisation and recognition/reversal of impairment losses on property, plant and equipment and intangible assets included in the cost of sales, selling costs and administrative expenses.

As at 30 September 2023, the Company redefined the adjusted EBITDA and included in its calculation methodology the depreciation/amortisation due to expenses by nature (so far, the depreciation/amortisation was recognised in profit or loss).

Therefore, the information presented below on segments was appropriately adjusted with respect to adjusted EBITDA and depreciation/amortisation in the first and second quarter of 2023 as well as the first 9 months of 2022.

Adjusted EBITDA – as a financial indicator not defined by IFRSs – is not a standardised measure and therefore its method of calculation may vary between entities, and consequently the presentation and calculation of adjusted EBITDA applied by the Group may not be comparable to that applied by other market entities.

Revenues from transactions with external entities and inter-segment transactions are carried out at arm's length. Eliminations of mutual settlements, revenues and costs between segments were presented in the item "Consolidation adjustments".

Unallocated assets and liabilities concern companies which have not been allocated to any segment. Assets which have not been allocated to the segments comprise cash. Liabilities which have not been allocated to the segments comprise trade liabilities and deferred corporate tax liabilities.

Note 3.2 Financial results of reporting segments

			from 1 January 2023 to 30 September 2023
					Reconciliation items to consolidated data
	KGHM Polska Miedź S.A.	KGHM INTERNATIONAL LTD.	Sierra Gorda S.C.M.*	Other segments	Elimination of data of the segment Sierra Gorda S.C.M	Consolidation adjustments ****	Consolidated financial statements
Note 3.3 Revenues from contracts with customers, of which:	22 470	1 687	2 479	9 399	(2 479)	(7 908)	25 648
- inter-segment	527	-	-	7 381	-	(7 908)	-
- external	21 943	1 687	2 479	2 018	(2 479)	-	25 648
Segment result – profit/(loss) for the period	1 737	( 494)	53	9	( 53)	( 416)	836
Additional information on significant cost/revenue items of the segment
Depreciation/amortisation recognised in expenses by nature	(1 275)	( 419)	( 586)	( 217)	586	26	(1 885)
(Recognition)/reversal of impairment losses on non-current assets, including:	87	515	-	2	-	( 89)	515
(recognition)/reversal of allowances for impairment of loans granted	89	493	-	-	-	( 89)	493
			As at 30 September 2023
Segment assets	51 067	15 799	13 783	6 358	(13 783)	(17 727)	55 497
Liabilities, including:	19 516	20 317	14 157	3 459	(14 157)	(20 903)	22 389
Segment liabilities	19 516	20 317	14 157	3 459	(14 157)	(20 992)	22 300
Liabilities unallocated to segments	-	-	-	-	-	89	89
Other information	from 1 January 2023 to 30 September 2023
Cash expenditures on property, plant and equipment and intangible assets – cash flows	2 177	560	821	371	( 821)	( 69)	3 039
Production and cost data			from 1 January 2023 to 30 September 2023
Payable copper (kt)	443.5	24.1	59.7
Molybdenum (million pounds)	-	0.1	3.1
Silver (t)	1 080.1	2.2	16.6
TPM (koz t)	83.3	26.0	24.2
C1 cash cost of producing copper in concentrate (USD/lb PLN/lb)**	3.01 12.74	5.32 22.52	1.55 6.56
Segment result - adjusted EBITDA	3 162	( 465)	1 297	241	-	-	4 235
EBITDA margin***	14%	(28%)	52%	3%	-	-	15%

* 55% of the Group's share in Sierra Gorda S.C.M.'s financial and production data.

** Unit cash cost of payable copper production, reflecting ore mining and processing costs, transport costs, the minerals extraction tax, administrative expenses during the mining phase and smelter treatment and refining charges (TC/RC) less by-product value.

C1 cost is in regard to payable copper in own concentrate in the case of the segment KGHM Polska Miedź S.A. and payable copper in end products of individual mines of the segment KGHM INTERNATIONAL LTD. and the segment Sierra Gorda S.C.M. C1 cost in PLN/lb was calculated using the average exchange rate by the NBP (arithmetical average of daily quotations per the NBP's tables).

*** Adjusted EBITDA to revenues from contracts with customers. For the purposes of calculating the Group's EBITDA margin (15%), the consolidated revenues from contracts with customers were increased by revenues from contracts with customers of the segment Sierra Gorda S.C.M. [4 235 / (25 648 + 2 479) * 100]

**** Adjustments arise from consolidation eliminations and financial data of companies unallocated to any segment.

Financial results of reporting segments for the comparable period

		from 1 January 2022 to 30 September 2022
			Reconciliation items
		KGHM Polska Miedź S.A.	KGHM INTERNATIONAL LTD.	Sierra Gorda S.C.M.*	Other segments	to consolidated data Elimination of data of the segment Sierra Gorda S.C.M	Consolidation adjustments****	Consolidated financial statements
Note 3.3	Revenues from contracts with customers, of which:	21 783	2 264	2 831	9 585	(2 831)	(7 936)	25 696
	- inter-segment	402	-	-	7 534	-	(7 936)	-
	- external	21 381	2 264	2 831	2 051	(2 831)	-	25 696
	Segment result - profit/(loss) for the period	3 538	1 020	122	-	( 122)	709	5 267
	Additional information on significant revenue/cost items of the segment
	Depreciation/amortisation recognised in expenses by nature	(1 117)	( 437)	( 741)	( 204)	741	23	(1 735)
	(Recognition)/reversal of impairment losses on non-current assets, including:	179	783	-	( 1)	-	( 230)	731
	reversal of allowances for impairment of loans granted	182	783	-	-	-	( 182)	783
		As at 31 December 2022
	Assets, including:	47 995	15 228	13 563	6 071	(13 563)	(15 850)	53 444
	Segment assets	47 995	15 228	13 563	6 071	(13 563)	(15 854)	53 440
	Assets unallocated to segments	-	-	-	-	-	4	4
	Liabilities, including:	18 320	19 276	13 992	3 446	(13 992)	(19 744)	21 298
	Segment liabilities	18 320	19 276	13 992	3 446	(13 992)	(19 804)	21 238
	Liabilities unallocated to segments	-	-	-	-	-	60	60
	Other information	from 1 January 2022 to 30 September 2022
	Cash expenditures on property, plant and equipment and intangible assets – cash flows	1 996	753	735	290	( 735)	( 83)	2 956
	Production and cost data				from 1 January 2022 to 30 September 2022
	Payable copper (kt)	442.5	47.3	67.7
	Molybdenum (million pounds)	-	0.1	2.4
	Silver (t)	999.8	1.4	20.7
	TPM (koz t)	61.8	45.2	25.2
	C1 cash cost of producing copper in concentrate (USD/lb PLN/lb)**
		2.39 10.55	2.02 8.89	1.48 6.53
	Segment result - adjusted EBITDA	4 490	786	1 556	243	-	-	7 075
	EBITDA margin***	21%	35%	55%	3%	-	-	25%

* 55% of the Group's share in Sierra Gorda S.C.M.'s financial and production data.

*** Adjusted EBITDA to revenues from contracts with customers. For the purposes of calculating the Group's EBITDA margin (25%) the consolidated revenues from contracts with customers were increased by revenues from contracts with customers of the segment Sierra Gorda S.C.M. [7 075 / (25 696 + 2 831) * 100]

**** Adjustments arise from consolidation eliminations and financial data of companies unallocated to any segment.

Reconciliation of adjusted EBITDA from 1 January 2023 to 30 September 2023 KGHM Polska Miedź S.A. KGHM INTERNATIONAL LTD. Other segments Consolidation adjustments* Consolidated financial statements Sierra Gorda S.C.M. Adjusted EBITDA (segments, total) 1 2 3 4 5 (1+2+3+4) ⁶ 7 (5+6-4) Profit/(Loss) for the period 1 737 ( 494) 9 ( 416) 836 53 [-] Profit or loss on involvement in joint ventures - 939 - - 939 - [-] Current and deferred income tax, mining tax* ( 903) 135 ( 35) ( 53) ( 856) ( 84) [-] Depreciation/amortisation recognised in expenses by nature (1 275) ( 419) ( 217) ²⁶ (1 885) ( 586) [-] Finance income and (costs) ( 125) ( 794) ( 37) 872 ( 84) ( 588) [-] Other operating income and (costs) 878 118 55 (1 303) ( 252) 14 [-] (Recognition)/reversal of impairment losses on non-current assets recognised in cost of sales, selling costs and administrative expenses - ( 8) 2 - ( 6) - Segment result - adjusted EBITDA 3 162 ( 465) 241 42 2 980 1 297 4 235

* Adjustments arise from consolidation eliminations and financial data of companies unallocated to any segment.

**55% share of the Group in the financial data of Sierra Gorda S.C.M.

*** Mining tax concerns only the segment Sierra Gorda S.C.M.

Reconciliation of adjusted EBITDA	from 1 January 2022 to 30 September 2022
	KGHM Polska Miedź S.A.	KGHM INTERNATIONAL LTD.	Other segments	Consolidation adjustments*	Consolidated financial statements	Sierra Gorda S.C.M. **	Adjusted EBITDA (segments, total)
	1	2	3	4	5 (1+2+3+4)	6	7 (5+6-4)
Profit/(Loss) for the period	3 538	1 020	-	709	5 267	122
[-] Profit or loss on involvement in joint ventures	-	1 260	-	-	1 260	-
[-] Current and deferred income tax, mining tax***	(1 319)	( 100)	( 22)	( 157)	(1 598)	( 105)
[-] Depreciation/amortisation recognised in expenses by nature	(1 117)	( 437)	( 204)	23	(1 735)	( 741)
[-] Finance income and (costs)	( 716)	( 765)	( 31)	817	( 695)	( 613)
[-] Other operating income and (costs)	2 200	276	15	123	2 614	25
[-] (Recognition)/reversal of impairment losses on non-current assets recognised in cost of sales, selling costs and administrative expenses	-	-	( 1)	( 45)	( 46)	-
Segment result - adjusted EBITDA	4 490	786	243	( 52)	5 467	1 556	7 075

* Adjustments arise from consolidation eliminations and financial data of companies unallocated to any segment.

**55% share of the Group in the financial data of Sierra Gorda S.C.M.

*** Mining tax concerns only the segment Sierra Gorda S.C.M.

Note 3.3 Revenues from contracts with customers of the Group – breakdown by products

					Reconciliation items to consolidated data
	KGHM Polska Miedź S.A.	KGHM INTERNATIONAL LTD.	Sierra Gorda S.C.M.*	Other segments	Elimination of data of the segment Sierra Gorda S.C.M.	Consolidation adjustments	Consolidated data
Products
Copper	17 208	911	2 002	7	(2 002)	( 35)	18 091
Silver	3 410	26	54	-	( 54)	-	3 436
Gold	776	124	204	-	( 204)	-	900
Services	142	518	-	1 967	-	(1 426)	1 201
Energy	74	-	-	348	-	( 270)	152
Salt	41	-	-	-	-	19**	60
Blasting materials and explosives	-	-	-	239	-	( 116)	123
Mining machinery, transport vehicles and other types of machinery and equipment	-	-	-	266	-	( 230)	36
Fuel additives	-	-	-	75	-	-	75
Lead	196	-	-	-	-	-	196
Products from other non-ferrous metals	-	-	-	107	-	( 5)	102
Other products	136	108	219	667	( 219)	( 430)	481
Merchandise and materials
Steel	-	-	-	354	-	( 71)	283
Petroleum and its derivatives	-	-	-	331	-	( 274)	57
Salt	-	-	-	60	-	( 60)**	-
Other merchandise and materials	487	-	-	4 978	-	(5 010)	455
TOTAL	22 470	1 687	2 479	9 399	(2 479)	(7 908)	25 648

from 1 January 2023 to 30 September 2023

* 55% of the Group's share in revenues of Sierra Gorda S.C.M.

** Including: PLN 60 million – reclassification from revenues from the sale of merchandise and materials to revenues from the sale of products.

					Reconciliation items to consolidated data
	KGHM Polska Miedź S.A.	KGHM INTERNATIONAL LTD.	Sierra Gorda S.C.M.*	Other segments	Elimination of data of the segment Sierra Gorda S.C.M.	Consolidation adjustments	Consolidated data
Products
Copper	17 002	1 454	2 338	8	(2 338)	( 40)	18 424
Silver	3 361	18	63	-	( 63)	-	3 379
Gold	516	223	198	-	( 198)	-	739
Services	129	423	-	1 614	-	(1 233)	933
Energy	22	-	-	235	-	( 146)	111
Salt	21	-	-	-	-	19**	40
Blasting materials and explosives	-	-	-	208	-	( 103)	105
Mining machinery, transport vehicles and other types of machinery and equipment	-	-	-	211	-	( 174)	37
Fuel additives	-	-	-	123	-	-	123
Lead	219	-	-	-	-	-	219
Products from other non-ferrous metals	-	-	-	136	-	( 3)	133
Other products	260	146	232	571	( 232)	( 340)	637
Merchandise and materials
Steel	-	-	-	534	-	( 134)	400
Petroleum and its derivatives	-	-	-	387	-	( 318)	69
Salt	-	-	-	40	-	( 40)**	-
Other merchandise and materials	253	-	-	5 518	-	(5 424)	347
TOTAL	21 783	2 264	2 831	9 585	(2 831)	(7 936)	25 696

from 1 January 2022 to 30 September 2022

* 55% of the Group's share in revenues of Sierra Gorda S.C.M.

** Including: PLN 40 million – reclassification from revenues from the sale of merchandise and materials to revenues from the sale of products.

Note 3.4 Revenues from contracts with customers of the Group – breakdown by type of contract

	from 1 January 2023 to 30 September 2023
					Reconciliation items to consolidated data
	KGHM Polska Miedź S.A.	KGHM INTERNATIONAL LTD.	Sierra Gorda S.C.M.*	Other segments	Elimination of data of the segment Sierra Gorda S.C.M.	Consolidation adjustments	Consolidated data
Total revenues from contracts with customers	22 470	1 687	2 479	9 399	(2 479)	(7 908)	25 648
Revenues from sales contracts, for which the price is set after the date of recognition of the sales (M+ principle), of which:	16 160	1 170	2 507	3	(2 507)	( 98)	17 235
settled	15 452	673	928	1	( 928)	( 96)	16 030
unsettled	708	497	1 579	2	(1 579)	( 2)	1 205
Revenues from realisation of long-term contracts for mine construction	-	489	-	180	-	( 152)	517
Revenues from other sales contracts	6 310	28	( 28)	9 216	28	(7 658)	7 896
Total revenues from contracts with customers, of which:	22 470	1 687	2 479	9 399	(2 479)	(7 908)	25 648
in factoring	6 715	-	-	136	-	( 136)	6 715
not in factoring	15 755	1 687	2 479	9 263	(2 479)	(7 772)	18 933

	from 1 January 2023 to 30 September 2023	from 1 January 2022 to 30 September 2022
Total revenues from contracts with customers, of which:	25 648	25 696
transferred at a certain moment	24 054	24 583
transferred over time	1 594	1 113

* 55% of the Group's share in revenues of Sierra Gorda S.C.M.

	from 1 January 2022 to 30 September 2022

	KGHM Polska Miedź S.A.	KGHM INTERNATIONAL LTD.	Sierra Gorda S.C.M.*	Other segments	Elimination of data of the segment Sierra Gorda S.C.M.	Consolidation adjustments	Consolidated data
Total revenues from contracts with customers	21 783	2 264	2 831	9 585	(2 831)	(7 936)	25 696
Revenues from sales contracts, for which the price is set after the date of recognition of the sales (M+ principle), of which:	16 853	1 840	3 113	104	(3 113)	( 104)	18 693
settled	15 866	997	1 346	104	(1 346)	( 104)	16 863
unsettled	987	843	1 767	-	(1 767)	-	1 830
Revenues from realisation of long-term contracts for mine construction	-	395	-	119	-	( 111)	403
Revenues from other sales contracts	4 930	29	( 282)	9 362	282	(7 721)	6 600
Total revenues from contracts with customers, of which:	21 783	2 264	2 831	9 585	(2 831)	(7 936)	25 696
in factoring	6 651	-	-	221	-	( 154)	6 718
not in factoring	15 132	2 264	2 831	9 364	(2 831)	(7 782)	18 978

* 55% of the Group's share in revenues of Sierra Gorda S.C.M.

Note 3.5 Revenues from contracts with customers of the Group – geographical breakdown reflecting the location of end clients

	from 1 January 2023 to 30 September 2023						from 1 January 2022 to 30 September 2022
					Reconciliation items to consolidated data
	KGHM Polska Miedź S.A.	KGHM INTERNATIONAL LTD.	Sierra Gorda S.C.M.*	Other segments	Elimination of data of the segment Sierra Gorda S.C.M.	Consolidation adjustments	Consolidated data	KGHM Polska Miedź S.A. Group
Poland	5 385	-	27	9 144	( 27)	(7 885)	6 644	6 855
Austria	309	-	-	16	-	-	325	417
Belgium	22	-	-	9	-	-	31	50
Bulgaria	244	-	-	12	-	-	256	39
Czechia	1 758	-	-	18	-	-	1 776	1 772
Estonia	19	-	-	2	-	-	21	12
France	697	-	-	3	-	-	700	635
The Netherlands	6	-	58	-	( 58)	-	6	6
Germany	4 939	-	-	51	-	-	4 990	4 333
Romania	123	-	-	1	-	-	124	114
Slovakia	167	-	-	11	-	-	178	147
Slovenia	84	-	-	3	-	-	87	105
Sweden	2	-	-	21	-	-	23	23
Hungary	1 117	-	-	6	-	-	1 123	1 160
The United Kingdom	861	-	-	3	-	-	864	1 288
Italy	1 602	-	-	15	-	-	1 617	1 745
Australia	269	-	-	-	-	-	269	588
Bosnia and Herzegovina	9	-	-	2	-	-	11	21
Chile	2	199	816	-	( 816)	-	201	251
China	2 264	734	1 013	-	(1 013)	-	2 998	2 721
India	-	-	12	-	( 12)	-	-	-
Japan	-	-	470	-	( 470)	-	-	63
Canada	25	637	-	-	-	( 23)	639	520
South Korea	-	-	54	-	( 54)	-	-	64
Norway	-	-	-	10	-	-	10	12
The United States of America	922	118	-	11	-	-	1 051	939
Switzerland	1 031	-	-	1	-	-	1 032	604
Türkiye	177	-	-	13	-	-	190	215
Taiwan	49	-	-	-	-	-	49	45
Morocco	-	-	-	-	-	-	-	37
Mexico	-	-	-	-	-	-	-	92
Algeria	65	-	-	-	-	-	65	16
Brazil	-	-	29	-	( 29)	-	-	1
Thailand	245	-	-	-	-	-	245	362
Philippines	-	( 1)	-	-	-	-	( 1)	170
Malaysia	52	-	-	-	-	-	52	42
Vietnam	2	-	-	-	-	-	2	173
Other countries	23	-	-	47	-	-	70	59
TOTAL	22 470	1 687	2 479	9 399	(2 479)	(7 908)	25 648	25 696

* 55% share of the Group in the revenues of Sierra Gorda S.C.M.

Note 3.6 Main customers

In the period from 1 January 2023 to 30 September 2023 and in the comparable period the revenues from no single contractor exceeded 10% of the revenues from contracts with customers of the Group.

Note 3.7 Non-current assets – geographical breakdown

	As at 30 September 2023	As at 31 December 2022
Poland	25 694	25 008
Canada	2 195	1 919
The United States of America	1 877	1 841
Chile	223	204
TOTAL*	29 989	28 972

* Non-current assets, excluding: derivatives, other financial instruments, other non-financial assets and deferred tax assets (IFRS 8.33b) in the total amount of PLN 12 224 million as at 30 September 2023 (PLN 11 407 million as at 31 December 2022).

Note 3.8 Information on segments' results

3.8.1 The segment KGHM Polska Miedź S.A.

Production results

	Unit	First 9 months of 2023	First 9 months of 2022	Change (%)	rd quarter 3 of 2023	nd quarter 2 of 2023	st quarter 1 of 2023
Ore extraction (dry weight)	mn t	23.3	23.0	+1.3	7.7	7.7	7.9
Copper content in ore	%	1.47	1.46	+0.7	1.47	1.47	1.46
Copper production in concentrate	kt	303.2	295.3	+2.7	100.9	101.8	100.5
Silver production in concentrate	t	1 011.6	988.8	+2.3	334.2	338.8	338.6
Production of electrolytic copper	kt	443.5	442.5	+0.2	147.7	146.8	149.0
- including from own concentrate	kt	287.0	273.9	+4.8	92.2	95.6	99.2
Production of metallic silver	t	1 080.1	999.8	+8.0	381.0	324.2	374.9
Production of gold	koz t	83.3	61.8	+34.8	25.6	26.8	30.9

In the first nine months of 2023, there was an increase in ore extraction (dry weight) by 302.1 thousand tonnes as compared to the corresponding period of 2022. Copper content increased to 1.47% due to extraction from a rich deposit.

Copper production in concentrate amounted to 303.2 thousand tonnes and was higher by 7.9 thousand tonnes (+2.7%) as compared to the first 9 months of 2022. An Increase in production is a result of a higher extraction of a better quality ore by the mines and its processing by the Concentrators.

As compared to the corresponding period of 2022, there was an increase in electrolytic copper production by 1.0 thousand tonnes. The increase in cathode production is a result of meeting the targets set in the production plan for 2023.

Production of metallic silver amounted to 1 080 tonnes and was higher by 80.3 tonnes (+8.0%) as compared to the first 9 months of 2022. Higher production of metallic silver results from the availability of feed material at the Precious Metals Plant.

Production of metallic gold amounted to 83.3 thousand troy ounces and was higher by 21.5 thousand troy ounces (+34.8%) as compared to the first 9 months of 2022. Higher production of metallic gold is a result of higher processing of goldbearing materials.

Sales

Revenues from contracts with customers

	Unit	First 9 months of 2023	First 9 months of 2022	Change (%)	rd quarter 3 of 2023	nd quarter 2 of 2023	st quarter 1 of 2023
Revenues from contracts with customers, including:	PLN mn	22 470	21 783	+3.2	6 960	7 140	8 370
- copper	PLN mn	17 208	17 002	+1.2	5 226	5 535	6 447
- silver	PLN mn	3 410	3 361	+1.5	1 154	1 035	1 221
Volume of copper sales	kt	444.5	429.8	+3.4	140.6	147.0	156.9
Volume of silver sales	t	1 040.7	1 037.4	+0.3	357.3	311.2	372.2

After the first 3 quarters of 2023, the revenues amounted to PLN 22 470 million and were higher by 3% than in the corresponding period of 2022. The main factors behind this increase in revenues were: higher sales volume of copper (+3%) and gold (+49%) as well as a change in the adjustment to revenues due to hedging transactions (+PLN 679 million).

Costs
	Unit	First 9 months of 2023	First 9 months of 2022	Change (%)	rd quarter 3 of 2023	nd quarter 2 of 2023	st quarter 1 of 2023
Cost of sales, selling costs and administrative expenses	PLN mn	20 583	18 410	+11.8	6 514	6 696	7 373
Expenses by nature	PLN mn	20 491	19 105	+7.2	6 341	6 827	7 323
Pre-precious metals credit unit cost of electrolytic copper production from own concentrate(1	PLN/t	44 728	38 202	+17.0	43 994	46 761	43 451
Total unit cost of electrolytic copper production from own concentrate	PLN/t	33 436	26 946	+24.1	32 933	35 431	31 980
C1 unit cost(2	USD/lb	3.01	2.39	+25.9	2.97	2.98	3.08

1) Unit cost prior to decrease by the value of anode slimes containing, among others, silver and gold

2) Cash cost of concentrate production reflecting the minerals extraction tax, plus administrative expenses and smelter treatment and refining charges (TC/RC), less depreciation/amortisation cost and the value of by-product premiums, calculated for sold payable copper in concentrate

The Parent Entity's cost of sales, selling costs and administrative expenses (total cost of products, merchandise and materials sold, selling costs and administrative expenses) for the first nine months of 2023 amounted to PLN 20 583 million and were higher by 12% as compared to the corresponding period of 2022, mainly due to realisation of a higher sales volume of copper from inventories and the higher minerals extraction tax, higher labour costs and costs of consumption of materials, fuels and energy carriers.

As compared to the first 9 months of 2022, total expenses by nature in the first 9 months of 2023 were higher by PLN 1 386 million alongside the higher by PLN 497 million minerals extraction tax (in the period from January to November 2022, the tax rate was 30% lower) and lower by PLN 904 million costs of consumption of purchased metal-bearing materials due to 12.7 thousand tonnes of copper lower volume of consumption with a 6% lower purchase price.

The increase in expenses by nature, excluding purchased metal-bearing materials and the minerals extraction tax, amounted to PLN 1 793 million and resulted mainly from the following increases:

− labour costs by PLN 577 million due to higher wage rates, coal equivalent and provision for future employee benefits,
− costs of materials, technological fuels, electrical and other energy by PLN 560 million mainly due to higher purchase prices,
− costs of external services by PLN 330 million, mainly due to overhauls and maintenance as well as mine preparatory work.

C1 cost for the first nine months of 2023 amounted to 3.01 USD/lb and was higher by 26% than in the corresponding period of 2022. The increase in this cost was mainly caused by the higher mineral extraction tax and higher extraction and metallurgical processing costs due to the aforementioned factors.

The pre-precious metals credit unit cost of electrolytic copper production from own concentrate (unit cost prior to decrease by the value of anode slimes containing, among others, silver and gold) amounted to 44 728 PLN/t (in the comparable period of 2022: 38 202 PLN/t) and was higher by 17%, mainly due to aforementioned higher extraction and smelting costs alongside an increase in copper production from own concentrate by 5%.

The total unit cost of electrolytic copper production from own concentrate amounted to 33 436 PLN/t and was higher by 24% as compared to the first nine months of 2022.

Financial results

The Company recorded a profit for the first 9 months of 2023 in the amount of PLN 1 737 million, or PLN 1 801 million lower than for the corresponding period of 2022.

Basic items of statement of profit or loss (in PLN million)

	First 9 months of 2023	First 9 months of 2022	Change (%)	rd quarter 3 of 2023	ndquarter 2 of 2023	st quarter 1 of 2023
Revenues from contracts with customers, including:	22 470	21 783	+3.2	6 960	7 140	8 370
- adjustment of revenues due to hedging transactions	425	(254)	×	198	162	65
Cost of sales, selling costs and administrative expenses	(20 583)	(18 410)	+11.8	(6 514)	(6 696)	(7 373)
Profit/(loss) on sales	1 887	3 373	(44.1)	446	444	997
Other operating income and (costs)	878	2 200	(60.1)	689	373	(184)
Finance income and (costs)	(125)	(716)	(82.5)	(298)	117	56
Profit/(loss) before income tax	2 640	4 857	(45.6)	837	934	869
Income tax expense	(903)	(1 319)	(31.5)	(307)	(209)	(387)
Profit/(loss) for the period	1 737	3 538	(50.9)	530	725	482
Depreciation/amortisation recognised in expenses by nature	1 275	1 117	+14.1	427	435	413
Adjusted EBITDA1	3 162	4 490	(29.6)	873	879	1 410

1) Adjusted EBITDA = profit/(loss) on sales + depreciation/amortisation (recognised in expenses by nature) + impairment loss (-reversal of impairment losses) on non-current assets, recognised in cost of sales, selling costs and administrative expenses

Main reasons for the change in profit or loss

Item	Impact on change in profit or loss (in PLN million)	Description
An increase in revenues from contracts with customers	+687	An increase in revenues due to: - a higher sales volume of copper by 14.7 kt, or by 3%, and gold by 976 kg, or by 49%, with basically the same volume of sales of silver (+PLN 857 million), - sales of basic products (copper, silver, gold) with a less favourable average USD/PLN exchange rate (-PLN 815 million), - a change in the adjustment of revenues due to hedging transactions by +PLN 679 million, - a change in metal prices, with copper price lower by 479 USD/t (-5%) alongside silver price higher by 1.48 USD/oz t (+7%) and gold price by 106 USD/oz t, or by +6% (-PLN 206 million), - an increase in other revenues from sales by PLN 172 million, including merchandise and materials (+PLN 234 million) with lower sales of sulphuric acid (-PLN 91 million).
An increase in cost of sales, selling costs and administrative expenses (1	(2 173)	An increase in costs due to: - lower make-to-stock production than in the previous year (-PLN 693 million), - a lower volume of consumption of purchased metal-bearing materials by 12.7 thousand tonnes of copper at a purchase price lower by 6% (+PLN 904 million), - an increase in other costs by PLN 2 384 million, including mainly the following costs: employee benefits (by PLN 577 million), minerals extraction tax (by PLN 497 million), electrical and other energy (by PLN 353 million) and external services (by PLN 330 million).

A decrease in the result on other operating activities	(1 322)	The decrease in the result was mainly due to: - a decrease in the result due to exchange differences on assets and liabilities other than borrowings (-PLN 1 390 million), - a decrease in financial support granted to municipalities (+PLN 92 million), - a decrease in reversals of impairment losses on financial instruments measured at amortised cost (-PLN 88 million), including due to loans (-PLN 89 million), - an increase in fair value gains on financial instruments measured at fair value through profit or loss (+PLN 72 million), including due to loans (+PLN 99 million), - a decrease in recognised provisions (+PLN 85 million).
An increase in the result on financing activities	+591	The increase in the result on financing activities was mainly due to a change in the result on exchange gains/(losses) on borrowings (+PLN 667 million) with an increase in finance costs due to unwinding of the discount (-PLN 51 million).
A decrease in income tax	+416	The decrease in income tax was mainly due to a decrease in current income tax (+PLN 431 million).

1) Cost of products, merchandise and materials sold, selling costs and administrative expenses

Change in profit or loss for the period (PLN million)

Capital expenditures

In the first three quarters of 2023, capital expenditures on property, plant and equipment amounted to PLN 2 167 million. Structure of expenditures on property, plant and equipment and intangible assets (PLN million)

	First 9 months of 2023	First 9 months of 2022	Change (%)	rd quarter 3 of 2023	nd quarter 2 of 2023	st quarter 1 of 2023
Mining	1 750	1 315	+33.1	638	559	553
Metallurgy	311	403	(22.8)	138	114	59
Other activities	18	39	(53.8)	10	5	3
Development work - uncompleted	3	7	(57.1)		1	2
Leases per IFRS 16	85	64	+32.8	12	51	22
Total	2 167	1 828	+18.5	798	730	639
including borrowing costs	152	123	+23.6	27	67	58

Investment activities comprised projects related to replacement, maintenance and development in the following areas: mining, metallurgy and other activities.

Projects related to replacement aimed at maintaining production equipment in an undeteriorated condition, represent 39% of expenditures incurred.

Structure of expenditures on replacement

Projects related to maintenance aimed at maintaining mine production at the level set in the approved Production Plan (development of infrastructure to match mine advancement) represent 32% of total expenditures incurred.

Development projects aimed at increasing the level of revenues from sales or maintaining them at the current level, at the implementation of technical and technological activities optimising the use of existing infrastructure, and at reducing operating costs, represent 28% of expenditures incurred.

Structure of expenditures on development

Adaptation projects aimed at adapting the company's operations to changes in laws, existing standards or other regulations, especially as regards occupational health and safety, securing property, cybersecurity, ethical and anticorruption standards, environmental impact, quality standards and management systems, represent 1% of expenditures incurred.

Structure of expenditures on adaptation

Detailed information on the advancement of key projects may be found in Part 1 Note 2 of the Report regarding the realisation of Strategy in 2023.

3.8.2 The segment KGHM INTERNATIONAL LTD.

Production results

Production results of KGHM INTERNATIONAL LTD.

	Unit	First 9 months of 2023	First 9 months of 2022	Change (%)	rd quarter 3 of 2023	nd quarter 2 of 2023	st quarter 1 of 2023
Payable copper, including:	kt	24.1	47.3	(49.0)	8.7	7.8	7.6
- Robinson mine (USA)	kt	17.3	39.6	(56.3)	6.8	5.2	5.3
- Sudbury Basin mines (Canada) (1	kt	3.9	1.5	x 2.6	0.8	1.5	1.6
Payable nickel	kt	0.3	0.3	-	0.0	0.2	0.1
Precious metals (TPM), including:	koz t	26.0	45.2	(42.5)	7.7	9.3	9.0
- Robinson mine (USA)	koz t	11.0	33.7	(67.4)	4.3	3.5	3.2
- Sudbury Basin mines (Canada) (1	koz t	15.1	11.5	31.3	3.4	5.9	5.8

1) McCreedy West mine in the Sudbury Basin

The Robinson mine significantly increased the copper production in the third quarter of 2023 as compared to the previous quarter. After the first 9 months, the production volume of KGHM INTERNATIONAL LTD. is still significantly (-49%) below the level recorded in the corresponding period of 2022, which is a result of processing ore from the transition zone and inventories with relatively low quality, which led to the decrease in recovery and copper content in concentrate produced by the Robinson mine. In the fourth quarter of 2023, the Robinson aims to reach the proper part of the Ruth West deposit, which has significantly better ore parameters than the currently mined transition zone. Therefore, it is expected that production results of the Robinson mine will improve.

Revenues

Volume and revenues from sales of KGHM INTERNATIONAL LTD. (USD million)

	Unit	First 9 months of 2023	First 9 months of 2022	Change (%)	rd quarter 3 of 2023	nd quarter 2 of 2023	st quarter 1 of 2023
Revenues from contracts with customers(1 , including:	USD mn	399	510	(21.8)	114	122	163
- copper	USD mn	215	327	(34.2)	58	59	98
- nickel	USD mn	7	9	(22.2)	1	3	3
- precious metals (TPM)	USD mn	46	72	(36.1)	12	15	19
Copper sales volume	kt	27.0	39.5	(31.6)	7.9	8.4	10.7
Nickel sales volume	kt	0.3	0.3	-	0.0	0.2	0.1
TPM sales volume	koz t	28.5	38.4	(25.8)	6.8	9.7	12.0

1) reflects processing premium

Revenues from sales of KGHM INTERNATIONAL LTD. (PLN million)

	Unit	First 9 months of 2023	First 9 months of 2022	Change (%)	rd quarter 3 of 2023	nd quarter 2 of 2023	st quarter 1 of 2023
Revenues from contracts with customers(1 , including:	PLN mn	1 687	2 264	(25.5)	470	506	711
- copper	PLN mn	911	1 454	(37.3)	242	243	426
- nickel	PLN mn	31	38	(18.4)	5	14	12
- TPM - precious metals	PLN mn	195	321	(39.3)	49	62	84

1) reflects processing premium

The revenues of the segment KGHM INTERNATIONAL LTD. in the first 9 months of 2023 amounted to USD 399 million, which is a decrease by USD 111 million (-22%) as compared to the corresponding period of 2022. First and foremost, the decrease in revenues is an effect of the results of the Robinson mine, which are still below production targets. Moreover, revenues in 2023 do not include Franke (the mine was sold in April 2022 and from the start of 2022 up to the moment the asset was sold its revenues amounted to USD 31 million). It should be noted that the revenues from mining services provided by the DMC Mining Services companies increased by 30%.

The impact of individual factors on the change in revenues is presented in the subsection on the financial results of KGHM INTERNATIONAL LTD.

Costs

C1 payable copper production cost of KGHM INTERNATIONAL LTD.

	Unit	First 9 months of 2023	First 9 months of 2022	Change (%)	rd quarter 3 of 2023	nd quarter 2 of 2023	st quarter 1 of 2023
C1 payable copper production cost (1	USD/lb	5.32	2.02	x2.6	5.40	5.66	5.00

1) C1 unit production cost of copper - cash cost of payable copper production, reflecting costs of ore extraction and processing, the minerals extraction tax, transport costs, administrative expenses during the mining phase and smelter treatment and refining charges (TC/RC) less by-product value

The cash cost of copper production for all of the mines in the segment KGHM INTERNATIONAL LTD. in the first 9 months of 2023 amounted to 5.32 USD/lb of copper sold, or nearly three-times more than in the corresponding period of 2022. The increase in this cost is due to the aforementioned problems with production by the Robinson mine and the related drop in copper sales volume. Also of significance were write-downs and adjustments of inventories, whose impact on the level of costs is discussed in the subsection on the financial results.

Moreover, it should be stressed that in 2022 work was carried out to gain access to the Robinson mine's Ruth West deposit, as a result of which some of the stripping costs were capitalised and not recognised in the results. However, in the period from January to September 2023 extraction was carried out in a transitional zone and the scope of access work, and therefore capitalisation of stripping costs, was significantly lower than in the corresponding period of 2022.

Unfavourable impact on C1 also came from the lower deductions due to the sale of precious metals, mainly due to the decline in gold production and sales by the Robinson mine.

Financial results

Financial results of KGHM INTERNATIONAL LTD. (USD million)

	First 9 months of 2023	First 9 months of 2022	Change (%)	rd quarter 3 of 2023	nd quarter 2 of 2023	st quarter 1 of 2023
Revenues from contracts with customers	399	510	(21.8)	114	122	163
Cost of sales, selling costs and administrative expenses, including: (1	(609)	(431)	+41.3	(181)	(199)	(229)
- reversal/(recognition) of impairment losses on non current assets	(2)	-	x	-	-	(2)
Profit/(loss) on sales	(210)	79	x	(67)	(77)	(66)
Profit/(loss) before taxation	(149)	252	x	(77)	18	(90)
Income tax	32	(23)	x	(3)	21	14
Profit/(loss) for the period	(117)	230	x	(80)	39	(76)
Depreciation/amortisation recognised in expenses by nature	(99)	(98)	+1.0	(40)	(33)	(26)
Adjusted EBITDA (2	(109)	177	x	(27)	(44)	(38)

Financial results of KGHM INTERNATIONAL LTD. (PLN million)

	First	First
	9 months	9 months	Change (%)	rd quarter 3	nd quarter 2	st quarter 1
	of 2023	of 2022		of 2023	of 2023	of 2023
Revenues from contracts with customers	1 687	2 264	(25.4)	470	506	711
Cost of sales, selling costs and administrative expenses, including: (1	(2 579)	(1 915)	+34.7	(752)	(827)	(1 000)
- reversal/(recognition) of impairment losses on non
current assets	(8)	-	x	(0)	0	(8)
Profit/(loss) on sales	(892)	349	x	(282)	(321)	(289)
Profit/(loss) before taxation, including:	(629)	1 120	x	(320)	85	(394)
Income tax	135	(100)	x	(16)	88	63
Profit/(loss) for the period	(494)	1 020	x	(336)	173	(331)
Depreciation/amortisation recognised in expenses by	(419)	(437)	(4.1)	(169)	(138)	(112)
nature
Adjusted EBITDA (2	(465)	786	x	(113)	(183)	(169)

1) Cost of products, merchandise and materials sold, selling costs and administrative expenses 2) Adjusted EBITDA = profit/(loss) on sales + depreciation/amortisation (recognised in expenses by nature) + impairment losses (-reversal of impairment losses) on non-current assets, recognised in cost of sales, selling costs and administrative expenses

Main factors impacting the change in profit or loss of KGHM INTERNATIONAL LTD.

Item	Impact on change of profit or loss (in USD million)	Description
(107)		Change in sales volumes, of which: - copper -USD 87 million - gold -USD 25 million - platinum and palladium +USD 3 million - other metals +USD 2 million
Lower revenues from contracts with customers (-USD 111 million)	(19)	Change in sales prices, of which: - copper -USD 17 million - gold +USD 4 million - platinum and palladium -USD 6 million - other metals -USD 0.2 million
	+27	Higher revenues due to mining services provided by DMC Mining Services
		Other factors, mainly less favourable processing and refining charges

Higher cost of sales, selling costs and administrative expenses (-USD 178 million)	(66)	Higher write-downs of ore and concentrate inventories as their value was higher than their net realisable sales price (write-down in the amount of USD 72 million in the first 9 months of 2023 versus USD 6 million in the corresponding period of 2022).
	(60)	Change in products and work in progress (+USD 15 million versus -USD 45 million in the first 9 months of 2022).
	(66)	Lower capitalised stripping costs due to the lower scope of access work by the Robinson mine
	+16	Lower costs, mainly of materials and energy
	(2)	Other factors
	(56)	Reversal of an allowance for impairment of loans granted for the construction of the Sierra Gorda mine (+USD 120 million in the first 9 months of 2023 versus +USD 176 million in the corresponding period of 2022)
Impact of other operating and financing activities (-USD 112 million)	(51)	Result on the sale of the Oxide project (to Sierra Gorda S.C.M.) and of the Franke mine in 2022 (in the period from January to September 2023 these type of transactions did not occur)
	(5)	Other factors, including lower interest on the loan granted to Sierra Gorda (-USD 2 million)
Income tax (+USD 54 million)	+54	Mainly due to the decrease in the Robinson mine's results.

Change in profit/loss for the period of KGHM INTERNATIONAL LTD. (USD million)

1) Excludes recognition/reversal of allowances for impairment of loans granted for the construction of the Sierra Gorda mine

Cash expenditures

Cash expenditures of KGHM INTERNATIONAL LTD. (USD million)

	First 9 months of 2023	First 9 months of 2022	Change (%)	rd quarter 3 of 2023	nd quarter 2 of 2023	st quarter 1 of 2023
Victoria project	50	37	+35.1	18	17	15
Stripping and other	82	133	(38.3)	35	16	31
Total	132	170	(22.4)	53	33	46

Cash expenditures of KGHM INTERNATIONAL LTD. (PLN million)

	First 9 months of 2023	First 9 months of 2022	Change (%)	rd quarter 3 of 2023	nd quarter 2 of 2023	st quarter 1 of 2023
Victoria project	212	164	+29.1	75	72	65
Stripping and other	348	589	(40.9)	147	63	138
Total	560	753	(25.7)	222	135	203

Cash expenditures by the segment KGHM INTERNATIONAL LTD. in the first 9 months of 2023 amounted to USD 132 million and were lower by USD 38 million (-22%) compared to the corresponding period of 2022, mainly in respect of the lower scope of stripping by the Robinson mine.

3.8.3 The segment Sierra Gorda S.C.M.

The segment Sierra Gorda S.C.M. is a joint venture of the KGHM Polska Miedź S.A. Group (55%) and the Australian mining group South32 (45%).

The following production and financial data are presented on a 100% basis for the joint venture and proportionally to the interest in the company Sierra Gorda S.C.M. (55%), pursuant to the methodology of presentation of data in note of the consolidated financial statements on operating segments.