These half-year figures from Polyus Gold (PGIL) aren't really as bad as they seem. Sure, the Russian gold miner booked a $469m (£301m) non-cash impairment charge because of lower precious metals prices. But nearly every major mining company has been hit by write-downs of various sizes this year, and Polyus still managed to generate adjusted cash profits of $417m in the period - down from $609m the year before.
That said, average cash costs increased 21 per cent year-on-year to $757 an ounce - hardly an encouraging sign. Yet costs are still relatively low by industry standards and the company remains in decent operational and financial shape. Polyus recently issued $750m of bonds, due in 2020, and had cash of $1.2bn at the end of June. Granted, some of that cash pile is earmarked for completion of the huge Natalka gold mine, which is expected to start production in summer 2014. Once fully up and running, the mine is forecast to churn out about 500,000 ounces of gold each year.
Polyus reconfirmed production guidance for 2013 at between 1.59 and 1.68m ounces. Deutsche Bank doesn't expect the company to pay a final dividend this year and forecasts full-year adjusted EPS of 28¢, falling to 12¢ in 2014 (from 32¢ in 2012).
POLYUS GOLD (PGIL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 200p | MARKET VALUE: | £6.1bn | |
| TOUCH: | 200-201p | 12-MONTH HIGH: | 231p | LOW: 186p |
| DIVIDEND YIELD: | 1.3%* | PE RATIO: | 24 | |
| NET ASSET VALUE: | 112¢ | NET CASH: | $14.5m | |
| Half-year to 30 Jun | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 1.16 | 533 | 13.0 | 4.10* |
| 2013 | 1.02 | -148 | -5.00 | nil |
| % change | -12 | - | - | - |
£1=$1.56 *Excludes a special dividend of 2.32¢ a share | ||||
