It’s less than three months since Peter Hambro was forced to leave the board of Petropavlovsk (POG), so it’s interesting to get his view from the outside. He told the IC the gold miner’s improved numbers at the half-year mark were brought about by “a continuation” of the pre-existing turnaround strategy. As well he might. A drive to boost cash flows and derisk the delivery of capital projects has resulted in net cash at the operating level of $74.6m (£56.2m) from $29.9m at the 2016 half year, while cash profit was up 30 per cent to $114m.
The rise in revenue reflected a 19 per cent increase in gold ore production coupled with a 5 per cent rise in the average realised gold price. A total of 232,400 ounces was produced during the period, with increases at the Pioneer, Malomir and Albyn mines, set against lower output at the Pokrovskiy site. Production guidance of 420,000-460,000 ounces was reaffirmed, but the rouble is showing signs of life, which means that total cash costs are likely to come in at the upper end of the $600-$700 an ounce range for 2017.
Consensus for the full-year gives adjusted EPS of 1¢, rising to 2.5¢ in 2018.
| PETROPAVLOVSK (POG) | ||||
| ORD PRICE: | 7.4p | MARKET VALUE: | £243m | |
| TOUCH: | 7.32-7.4p | 12-MONTH HIGH: | 9.05p | LOW: 5.8p |
| DIVIDEND YIELD: | nil | PE RATIO: | 6 | |
| NET ASSET VALUE: | 17¢ | NET DEBT: | 97% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2016 | 254 | 4.8 | 0.3 | nil |
| 2017 | 304 | 46.8 | 1.0 | nil |
| % change | +20 | +877 | +259 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| £1=$1.33 | ||||
