Despite a drop in production, Petropavlovsk (POG) squeaked through to post-tax profit of $9.2m (£7.1m) in the six months to June, the first time the gold miner has recorded a positive half-year financial performance since 2012. And with the average realised price of gold 2 per cent lower in the period, the company was forced to cut capital expenditure by a third to $11.9m, reverse impairments and reduce central administration expenses by 17 per cent.
A decline in the rouble also helped, bringing total cash costs down by 14 per cent to $663 per ounce (oz), although the currency's volatility also resulted in a foreign exchange loss of $5.9m in the period. Other hurdles await. At present, $344.2m of debt needs to be repaid before June 2017, although chairman Peter Hambro expects to have concluded a refinancing with Russian lenders by the end of October. Meanwhile, severe flooding in the Amur region, which is home to Petropavlovsk's four producing mines, is causing something of an operational headache and has already resulted in a drop in this year's production guidance to the lower end of the previously flagged 460,000-500,000 oz range.
Analysts at SP Angel are forecasting full-year adjusted pre-tax profits of $33m, rising to $110m and EPS of 3¢ in the year to December 2017, on a flat gold price of $1,300 an ounce.
PETROPAVLOVSK (POG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 7.5p | MARKET VALUE: | £245m | |
| TOUCH: | 7-7.5p | 12-MONTH HIGH: | 9p | LOW: 5.1p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 15¢ | NET DEBT: | 116% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 297 | -26.0 | -2.0 | nil |
| 2016 | 254 | 4.8 | 0 | nil |
| % change | -15 | - | - | - |
Ex-div: na Payment: na £1 = $1.30 | ||||
