A $559m (£378m) non-cash charge for the revaluation of dollar-denominated loans pushed the bottom line at Polymetal (POLY) into the red last year. But the underlying picture at the Russian precious metals miner was far more favourable, as a decline in cash costs - particularly in dollar terms - mitigated declines of 7 and 18 per cent respectively in the average gold and silver prices realised. At $685m, cash profits were 15 per cent up on last year on a margin of 41 per cent, against 35 per cent in 2013.
A ramp up at the Mayskoye gold deposit, and improved operational performance at the Dukat and Omolon mines, helped bump up gold (equivalent) production to 1.43m ounces - a 12 per cent increase over 2013 and well ahead of guidance. This rising production, coupled with falling rouble-denominated expenses, drove down cash costs by 15 per cent to $634 an ounce. Looking ahead, Polymetal is aiming to produce around 1.35m ounces this year within a reduced cost range of $575-$625 per ounce.
The miner's ore reserves increased appreciably following the September acquisition of the Kyzyl gold project in Kazakhstan, but the deal also increased net borrowings by around a fifth. Société Générale predicts net income of $150m in 2015, on revenues of $1.73bn.
POLYMETAL INTERNATIONAL (POLY) | ||||
---|---|---|---|---|
ORD PRICE: | 560p | MARKET VALUE: | £2.4bn | |
TOUCH: | 559-661p | 12-MONTH HIGH: | 634p | LOW: 440p |
DIVIDEND YIELD: | 4.9% | PE RATIO: | na | |
NET ASSET VALUE: | 207¢ | NET DEBT: | 134% |
Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
---|---|---|---|---|
2010 | 0.90 | 306 | 67.0 | nil |
2011 | 1.30 | 409 | 79.0 | 20 |
2012 (restated) | 1.90 | 651 | 110.0 | 31 † |
2013 | 1.71 | -158 | -51.0 | 9 |
2014 | 1.69 | -138 | -53.0 | 41 |
% change | -1 | - | - | +356 |
Ex-div: 30 Apr Payment: 29 May £1 = $1.49. †Excludes special dividend of 50¢ |