By Adam Easton and Alisdair Bowles

August 18, 2017 - Europe's largest hard coking coal company, Jastrzebska Spolka Weglowa (JSW), said late Thursday its total coking coal sales in the second quarter fell 10% year on year to 2.615 million mt thanks to the disposal of its WZK Victoria coking plant.

Coking coal sales to external customers were flat at 1.516 million mt, the Polish company said in a presentation of its Q2 results.

Sales to customers within JSW's capital group fell 20% year on year to 1.099 million mt thanks to the sale of WZK Victoria.

JSW said its external sales benefited from a 108% year on year rise in the average price of its hard and semi soft coking coal to Zloty 647.62/mt ($177.81/mt).

However, the company's unit mining cost increased 18% to Zloty 293.33/mt.

The company said in the first half of 2017 it sold 78.6% of its coking coal volumes outside the capital group to domestic customers and 21.4% to international customers, compared to 71.7% and 28.3% respectively in H1 2016.

Coking coal production in Q2 fell 5% year on year to 2.733 million mt, and it accounted for 72% of the total output from JSW's five mines.

Output was down due to the disposal of its Krupinski and Jas Mos mines as part of the company's cost-cutting program.

The Borynia-Zofiowka-Jastrzebie and Pniowek mines produced mainly coking coal with low ash, sulfur and volatile matter content.

The Budryk and Knurow-Szczyglowice mines produced mainly high-vol coking coal with low ash and sulfur content.

In the coke segment, JSW said its Q2 sales fell 12% year on year to 997,200 mt in a period when both EU and global steel production increased by 4.3% and 3.8% respectively.

JSW achieved an average coke sales price of Zloty 906.53/mt, up 68% year on year.

Coke production in Q2 fell 17% year on year to 870,000 mt. In H1 2017 blast furnace coke accounted for 71.9% of total coke output and industrial coke accounted for 21.7%, JSW said.

The company posted a 12.5% better than expected net profit of Zloty 566.2 million ($155.3 million) in the second quarter compared to a net loss of Zloty 89 million a year earlier.