Petropavlovsk (POG) halved its net loss for 2014 to $348m (£227m), but the relative improvement can be attributed to $562m in impairments booked the previous year. Cash profits for the Russia-focused gold miner declined by around a fifth to $252m, due in part to a 12 per cent fall in realised gold prices.
With net debt approaching the $1bn mark at the year-end, the group's primary focus is getting the balance sheet in order. To this end, Petropavlovsk recently secured the eleventh-hour support of shareholders for a debt refinancing scheme, involving a new $100m five-year convertible bond as well as a heavily discounted rights issue. Petropavlovsk's management, under the auspice of chairman and co-founder Peter Hambro, now plans to pare back net debt to below $600m by the 2015 year-end, from $707m at the end of March.
Gold production fell by 16 per cent during the year to 625,000 ounces, but the miner said it was still on track to produce between 680,000 and 700,000 ounces in 2015. It will have to achieve this without a contribution from its stake in the Koboldo gold-mining company, which it hived off last month for $18.7m. And Petropavlovsk will also need to step up its production rate for the remainder of the year because it has so far been working its way through lower-grade ore.
| PETROPAVLOVSK (POG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 5.88p | MARKET VALUE: | £193m | |
| TOUCH: | 5.85-5.88p | 12-MONTH HIGH: | 29p | LOW: 2p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 17¢ | NET DEBT: | 125% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 0.6 | 69.0 | 11.0 | 10 |
| 2011 | 1.3 | 361 | 124 | 12 |
| 2012 | 1.2 | 40.0 | na | 12† |
| 2013 | 1.2 | -523 | -259 | nil |
| 2014 | 0.9 | -14.3 | -94.0 | nil |
| % change | -28 | - | - | - |
†Includes 5p a share scrip dividend. £1=$1.54 | ||||
