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25 Aug 2015 07:00

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 Release time |  IMMEDIATE |
Date | 25 August 2015 |
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Polymetal International plc
Half-yearly report for the six months ended 30 June 2015
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Polymetal International plc (LSE, MICEX: POLY; ADR: AUCOY) (together with its subsidiaries - "Polymetal", the "Company", or the "Group") is pleased to announce the Group's financial results for the six months ended 30Â June 2015.
FINANCIAL HIGHLIGHTS
· Revenue in 1H 2015 decreased by 11% to US$ 648 million compared to 1H 2014 ("year-on-year") driven by gold and silver prices decreasing 7% and 18% respectively year-on-year. The volume of both gold and silver sold was largely unchanged from 1H 2014, with gold equivalent sold lower by 4% to 537 Koz year-on-year driven by an adverse movement in the gold/silver price ratio.
· Group Total cash cost ("TCC")1 were US$ 552 per gold equivalent ounce ("GE oz"), down 14% compared to 2H 2014 ("half-on-half") and down 12% year-on-year on the back of robust operating performance across the portfolio and significant Russian Rouble depreciation against the US Dollar, which more than offset the combined negative impact of domestic inflation and change in gold/silver price ratio.
· All-in sustaining cash costs ("AISC")1 amounted to US$ 786/GE oz, a decrease of 16% year-on-year, mainly driven by a reduction in TCC during the period, combined with the reduction in per ounce sustaining capital and exploration expenditure at the operating mines.
· Adjusted EBITDA1 was US$ 297 million, a decrease of 4% compared to 1H 2014, driven mainly by a decline in commodity prices largely offset by strong cost performance. Adjusted EBITDA margin was 46% compared to 43% in 1H 2014;
· Net earnings2 were US$ 98 million. Underlying net earnings (adjusted for the after-tax amount of impairment charges/reversals and forex exchange loss) were US$ 118 million (1H 2014: US$ 124 million), down 5% year-on-year.
· Special and regular dividends for 2014 in the amount of US$ 0.20 and US$ 0.13 per share (total of US$ 139 million) were paid in January and May 2015 respectively, in accordance with Polymetal's dividend policy. An interim dividend of US$ 0.08 per share representing 30% of the Group's underlying net earnings for 1H 2015 is proposed by the Board. In accordance with the current dividend policy, the Board has the discretion to declare a regular dividend at the Net debt/Adjusted EBITDA ratio above 1.75.
· Net debt at 30 June 2015 decreased by US$ 18 million to US$ 1,231 million (31 December 2014: US$ 1,249 million), while the Company paid dividends of US$ 139 million during the period3. Free cash flow was US$ 77 million, compared to US$ 29 million a year earlier, and is expected to be even stronger in the second half of the year due to the planned de-stockpiling at Mayskoye and the seasonal reduction of the timing gap between production and sales.
· The Company reaffirms its annual production guidance of 1.35 Moz of gold equivalent in 2015 and reduces its full-year Total cash cost guidance from US$ 575-625/GE oz to US$ 525-575/GE oz and its All-in sustaining cash costs guidance from US$ 750-800/GE oz to US$ 700-750/GE oz on the back of continued weakness of the Russian Rouble and expectation of a continued strong operating performance.
"I am pleased to report robust cost performance and cash flow generation in these challenging market conditions", said Vitaly Nesis, Group CEO. "With strong operational delivery and financial strength in the current environment, we remain focused on free cash flow generation and providing dividends while progressing steadily on the development of the next generation of assets, including the Kyzyl project.
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1 The definition and calculation of non-IFRS measures used in this report, including Adjusted EBITDA, Total cash costs, All-in sustaining cash costs, Underlying net earnings, Net debt, Free cash flow and the related ratios, is explained in the "Financial Review" section below.
2Profit /(loss) for the financial period
3 Including US$ 84 million already included in net debt as at 31 December 2014.
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Financial highlights(1) | 1H 2015 | 1H 2014 | Change, % |
Revenue, US$m | 648 | 727 | -11% |
Total cash cost, US$/GE oz | 552 | 627 | -12% |
All-in sustaining cash cost, US$/GE oz | 786 | 938 | -16% |
Adjusted EBITDA, US$m | 297 | 310 | -4% |
Adjusted EBITDA margin, % | 46% | 43% | +3 pp. |
Average realised gold price, US$/ oz | 1,207 | 1,297 | -7% |
Average LBMA gold price, US$/ oz | 1,206 | 1,290 | -7% |
Average realised silver price, US$/ oz | 15.7 | 19.1 | -18% |
Average LBMA silver price, US$/ oz | 16.6 | 20.1 | -17% |
Net earnings, US$m | 98 | 100 | -2% |
Underlying net earnings, US$m | 118 | 124 | -5% |
Return on Equity, % | 13% | 11% | +2% |
Dividend payout ratio, %(2) | 34% | 31% | +3 pp. |
Basic EPS, US$/share | 0.23 | 0.26 | -10% |
Underlying EPS, US$/share | 0.28 | 0.26 | +8% |
Dividend declared during the period, US$/share(3) | 0.13 | 0.08 | +63% |
Dividend declared for the period, US$/share | 0.08 | 0.08 | - |
 Net debt, US$m | 1,231 | 1,249(4) | -1% |
Net debt/Adjusted EBITDA | 1.83 | 1.82(4) | +1% |
Net operating cash flow, US$m | 175 | 141 | +24% |
Capital expenditure, US$m | 86 | 105 | -17% |
Free cash flow(5), US$m | 77 | 29 | +166% |
Notes: | |||
(1) Totals may not correspond with the sum of the separate figures due to rounding. % changes can be different from zero even when absolute amounts are unchanged because of rounding. Likewise, % changes can be equal to zero when absolute amounts differ due to the same reason. This note applies to all the tables in this release (2) Dividend payout ratio is calculated as percentage of dividend declared for the period to underlying EPS. (3) 1H 2015: Final dividend for FY 2014 paid in May 2015. 1H 2014: Final dividend for FY 2013 paid in May 2014. (4) As at 31 Dec 2014 (5) Free cash flow is defined as net cash flows from operating activities less cash flows used in investing activities (not including acquisition costs) | |||
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The full version of the Half-yearly report for the 6 months ended 30 June 2015 is attached.
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http://www.rns-pdf.londonstockexchange.com/rns/9737W_-2015-8-25.pdf
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Conference call and webcast
Polymetal will hold a conference call and webcast on Tuesday 25 August 17:30 Moscow time (15:30 London time).
To participate in the call, please dial:
8 10 8002 041 4011 access code 440356# (free from Russia), or
+44 (0) 20 3367 9456 (free from the UK), or
+1 855 402 7761 (free from the US), orÂ
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any of the above numbers (from outside the UK, the US and Russia) or follow the link:
http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=3031
Please be prepared to introduce yourself to the moderator or register.
Webcast replay will be available on Polymetal's website (www.polymetalinternational.com) and at http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=3031. A recording of the call will be available immediately after the call at +44 (0) 20 3367 9460 (from within the UK), +1 87 7642 3018 (from within the US)Â and +7 495 745 7948 (from within Russia), access code 295942#, from 6:30 pm Moscow time Tuesday, August 25, till 6:30 pm Moscow time Tuesday, September 1, 2015.
Enquiries
| Media | Â | Investor Relations | |
Instinctif Partners Leonid Fink  | +44 20 7457 2020 | Polymetal Maxim NazimokEvgenia OnuschenkoElena Revenko | ir@polymetalinternational.com  +7 812 313 5964 (Russia) +44 20 7016 9503 (UK) |
| Joint Corporate Brokers | Â | ||
Morgan Stanley Bill Hutchings Sam McLennan | +44 20 7425 8000 | RBC Europe Limited Tristan LovegroveJonny Hardy | +44 20 7653 4000 |
FORWARD-LOOKING STATEMENTS
THIS RELEASE MAY INCLUDE STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, "FORWARD-LOOKING STATEMENTS". THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS AT THE DATE OF THIS RELEASE. THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, INCLUDING THE WORDS "TARGETS", "BELIEVES", "EXPECTS", "AIMS", "INTENDS", "WILL", "MAY", "ANTICIPATES", "WOULD", "COULD" OR "SHOULD" OR SIMILAR EXPRESSIONS OR, IN EACH CASE THEIR NEGATIVE OR OTHER VARIATIONS OR BY DISCUSSION OF STRATEGIES, PLANS, OBJECTIVES, GOALS, FUTURE EVENTS OR INTENTIONS. THESE FORWARD-LOOKING STATEMENTS ALL INCLUDE MATTERS THAT ARE NOT HISTORICAL FACTS. BY THEIR NATURE, SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS BEYOND THE COMPANY'S CONTROL THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE COMPANY'S PRESENT AND FUTURE BUSINESS STRATEGIES AND THE ENVIRONMENT IN WHICH THE COMPANY WILL OPERATE IN THE FUTURE. FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE. THERE ARE MANY FACTORS THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO DISSEMINATE ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE COMPANY'S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENTS ARE BASED.
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