Currently viewing Global edition

Polymetal earnings down on forex losses

Russia-based precious metals miner Polymetal International’s 2019 first-half net earnings dipped to US$153 million, from the previous year’s $175 million, due mainly to foreign exchange losses, as its revenues climbed 20% to $946 million and gold-equivalent production rose 22% yoy for the period.
Polymetal earnings down on forex losses Polymetal earnings down on forex losses Polymetal earnings down on forex losses Polymetal earnings down on forex losses Polymetal earnings down on forex losses

A dump truck at Polymetal’s Kyzyl mine in Kazakhstan

The company approved an interim dividend of 20c/share for the first half of this year.

Polymetal sold 604,000oz of gold in the first half of 2019, an increase of 36% on the previous year, while silver sales were down 15% to 10.3 million oz.

The company said it remained on track to meet its 2019 production guidance of 1.55Moz of gold-equivalent at AISC of $800-850/oz gold-equivalent, dependent on exchange rates and metal prices.

The company's adjusted EBITDA was $403 million, an increase of 34% year-on-year mostly driven by higher production volumes, in particular the launch and ramp-up of Kyzyl which reached full capacity during the period.

Gold prices were broadly flat year-on-year, while silver prices were down 7%, Polymetal said.

"Our strong earnings during the period reflect solid operational delivery, and most notably excellent results from Kyzyl," said Polymetal Group chief executive Vitaly Nesis.

"Traditionally, we expect seasonally lower costs, higher production and materially stronger cash flow generation in the second half of the year, allowing us to meet our full year cost and production guidance."

Costs impacting the company in the first half included one-off investments at Varvara for locomotive and mining fleet, and a scheduled tailings storage facility upgrade at Dukat.

The company's net debt increased to $1.69 billion, driven by a seasonal working capital increase and payment of the financial year 2018 final dividend (31c/share).

Polymetal said it expected its costs to decline in the second half of the year on the back of seasonally higher production at Svetloye and Mayskoye, and due to closer alignment of sales to production at Dukat and Kyzyl.

The interim dividend Polymetal approved for H1 2019 represents 50% of the group's underlying net earnings for the first half of 2019. The dividend is due to be paid on September 27.