Russia-based gold miner Petropavlovsk, formerly Peter Hambro Mining, looks set to miss its production target of 670,000 ounces (oz) this year by around 5 per cent. This follows a 26 per cent fall in gold production in the first half to 166,000/oz, partly due to changes to production at the main Pioneer mine to pave the way for its expansion in the second half, but also because of a bad winter and delays in deliveries of equipment.
First-half profits were virtually eliminated before $35m (£22.5m) of exceptional write-offs - mainly relating to the titanium sponge joint venture - pushed the company into a first-half loss in spite of a rise in the average gold price from $917/oz to $1,154/oz over the year.
However, as chairman Peter Hambro says, the gold is still there, and assuming the new equipment becomes operational without further delay, production of higher-grade ore should build at Pioneer, where the third production line came on stream in April. Moreover, the Malmomir mine has just come on stream and the first shipments of titanomagnetite are about start from Kuranakh and a further mine, Albyn, should be coming into production next year.
Citi forecast full year pre-tax profits of $380m and EPS of 156¢ (from $197m and 95¢ in 2009).
More analysis of company results
PETROPAVLOVSK (POG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,007p | MARKET VALUE: | £1.89bn | |
| TOUCH: | 1,006-1,007p | 12-MONTH HIGH: | 1,365p | LOW: 710p |
| DIVIDEND YIELD: | 1% | PE RATIO: | na | |
| NET ASSET VALUE: | 730¢ | NET DEBT: | 9% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 214 | 102.8 | 61 | nil |
| 2010 | 196 | -33.4 | -31 | 3 |
| % change | -9 | - | - | - |
Ex-div: 29 Sep Payment: 29 Oct £1:$1.556 | ||||
