Compared with the Russian miner’s strong half-year results, full-year figures for Polymetal International (POLY) don’t initially appear very inspiring. Net earnings were unchanged year on year at $355m (£273m), the return on assets dipped from 18 to 17 per cent, and the $33m rise in free cash flow was aided by a $39m drop in capital expenditure.
But there was resilience beneath these headlines, as Polymetal had to contend with a 10 per cent drop in realised prices from one half to the next. Compounding this, gold output was again weighted to the six months to December, meaning more ounces were sold at a lower price. That second-half gold revenues held steady at $885m highlights the strength of the ramp-up at Kyzyl in Kazakhstan, and the reliability of old mines such as Albazino-Amursk and Svetloye.
Overheads are also falling. Full-year total cash costs of $649 per gold-equivalent ounce were well down on the $683-an-ounce reading at the half year, below guidance, and are expected to sit between $600 and $650 in 2019. The picture was similar with the all-in sustaining cost metric, which accounts for exploration and development, and which is now expected to range between $800 and $850 an ounce this year, depending on movements in the rouble and the price of Brent crude.
On average, analysts are forecasting earnings of $1.11 a share for 2019, up from consensus estimate of 87¢ for last year.
| POLYMETAL INTERNATIONAL (POLY) | ||||
| ORD PRICE: | 875p | MARKET VALUE: | £4.11bn | |
| TOUCH: | 874.8-875.4 | 12-MONTH HIGH: | 901p | LOW: 578p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 294¢ | NET DEBT: | 109% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2014 | 1.69 | -138 | -53 | 41 |
| 2015 | 1.44 | 276 | 52 | 51 |
| 2016 | 1.58 | 564 | 93 | 42 |
| 2017 | 1.82 | 443 | 82 | 44 |
| 2018 | 1.88 | 426 | 79 | 48 |
| % change | +4 | -4 | -4 | +9 |
| Ex-div: | 9 May | |||
| Payment: | 24 May | |||
| £1=$1.30. | ||||
