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Polymetal ups payout after record year

Miner handing 100 per cent of its golden free cash flow back to shareholders
Polymetal ups payout after record year
  • Pre-tax profit for 2020 more than double the 2019 figure, at $1.4bn
  • Final dividend of 89¢ announced

Polymetal (POLY) kept things simple in 2020. It maintained its cost level and let the profits roll in, thanks to the record gold prices. Its adjusted cash profit for last year was $1.7bn (£1.2bn), a 57 per cent increase on 2019. The total 2020 dividend has increased by the same amount, to 129¢, equal to paying out 100 per cent of free cash flow. 

While the pandemic had little impact on the miner’s results – capital spending came in 8 per cent above guidance at $583m – five workers have died from the virus in the past 12 months. 

Polymetal chief executive Vitaly Nesis said he was “pleased to report record net earnings for the year amidst a challenging global backdrop”. The gold miner forecasts a drop in production and increase in costs this year but a return to the 1.6m ounces (oz) level in 2022. Buy. 

Last IC View: Buy, 1,611p, 26 Nov 2020

POLYMETAL INTERNATIONAL (POLY)  
ORD PRICE:1,472pMARKET VALUE:£ 6.9bn
TOUCH:1,471.5-1,472.5p12-MONTH HIGH:2,085pLOW: 990p
DIVIDEND YIELD:6.3%PE RATIO:9
NET ASSET VALUE:424¢NET DEBT:69%
Year to 31 DecTurnover ($bn)Pre-tax profit ($bn)Earnings per share (¢)Dividend per share (¢)
20161.580.5693.042.0
20171.820.4482.044.0
20181.880.4379.048.0
20192.250.6210282.0
20202.871.41230129
% change+28+127+125+57
Ex-div:06 May   
Payment:28 May   
£1=$1.40