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29 Mar 2016 07:00
Release time |
IMMEDIATE |
Date | 29 March 2016 |
Polymetal International plc
Preliminary results for the year ended 31 December 2015
Polymetal International plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its subsidiaries - "Polymetal", the "Company", or the "Group") is pleased to announce the Group's preliminary results for the year ended 31 December 2015.
FINANCIAL HIGHLIGHTS
· Polymetal has delivered a solid set of operating and financial results. The original production guidance was exceeded by 4% while operating costs and capital expenditures for the year were below original guidance.
· Revenue for the year ending 2015 decreased by 15% to US$ 1,441 million ("year-on-year") as a result of average realised gold and silver prices decreasing by 8% and 17% respectively year-on-year. Gold sales were 864 Koz, down 8% year-on-year while silver sales were 31.2 Moz, up 6% year-on-year, in line with production volume dynamics.
· Group Total cash cost1 ("TCC") was US$ 538/gold equivalent ounce ("GE oz"), down 15% from 2014 levels and below original guidance of US$ 575-625/GE oz driven by significant Russian Rouble depreciation against the US Dollar, which more than offset the combined negative impact of domestic inflation and change in the gold/silver price ratio. Total cash costs in the second half of the year decreased by 4% to US$ 529/GE oz versus the first half of 2015 driven by a strong operational performance at Dukat, Omolon and Albazino.
· All-in sustaining cash costs1 ("AISC) decreased by 18% year-on-year to US$ 733/GE oz and were below original guidance of US$ 750-800/GE oz primarily as a result of decline in total cash costs during the period, and other expenditures significantly influenced by Rouble and Tenge's devaluation.
· Adjusted EBITDA1 was US$ 658 million, a decrease of just 4% year-on-year despite the revenue decline which was largely offset by a strong cost performance. Adjusted EBITDA margin was 46% compared to 41% in 2014.
· Net earnings2 were US$ 221 million versus a US$ 210 million loss in 2014. Underlying net earnings (adjusted for the after-tax amount of impairment charges/reversals and foreign exchange loss) were US$ 296 million (2014: US$ 282 million), up 5% year-on-year, driven by depreciation of local currencies.
· Capital expenditure was US$ 205 million, below the original guidance of US$ 240 million, as a result of currency devaluation .The Group is on track on construction at Kyzyl and Svetloye projects.
· The Company continued to generate significant free cash flow1, which was US$ 263 million in 2015 (2014: US$ 306 million).
· On the back of robust cash flow generation for the year, the Company paid out US$ 127 million of special dividends to shareholders, bringing the total amount of dividends declared during 2015 to US$ 216 million.
· Net debt at 31 December 2015 was US$ 1,298 million, an increase of 4% year-on-year, mainly as a result of the net settlement of the Kyzyl put option in September 2015 and other cash-based acquisitions. The Group maintains a comfortable Net debt/ Adjusted EBITDA ratio of 1.97x.
· A final dividend of US$ 0.13 per share (approx. US$ 55 million) representing 30% of the Group's underlying net earnings for 2H 2015 is proposed by the Board, which, in accordance with the current dividend policy, has the discretion to declare regular dividend at the Net debt/Adjusted EBITDA ratio above 1.75.
OPERATING HIGHLIGHTS
· Polymetal reports another year of strong operational delivery. Gold equivalent production for the year (based on the new 1:80 Ag/Au conversion ratio1) comprised 1.27 Moz and exceeded the original production guidance for 2015 by 4%.
· Gold production was 861 Koz, down 9% year-on-year, while silver production was 32.1 Moz, an increase of 12% compared to 2014. Gold sales were 864 Koz, down 8% year-on-year while silver sales were 31.2 Moz, up 6% year-on-year, in line with production dynamics and volume.
· The Company's health and safety performance has deteriorated in 2015. In response, the Board has established a new Safety and Sustainability Committee, and both the Board and management are determined to improve this situation in 2016.
· The Company reconfirms its production guidance for 2016 (1.23 Moz of gold equivalent) and 2017 (1.30 Moz of gold equivalent).
· Taking into account the continued volatility of both the Russian Rouble and Kazkah Tenge as well as commodity prices, total cash cost guidance for 2016 is maintained at US$ 525-575/GE oz and all-in sustaining cash costs of US$ 700-750/GE oz.
"I am pleased to report robust cost performance and cash flow generation in these volatile market conditions", said Vitaly Nesis, the Group CEO. "Our strong operational delivery and financial strength in the current environment allows us to focus on development of the next generation of assets, including Kyzyl and other longer-term projects, while generating free cash flow and paying substantial dividends to shareholders."
Financial highlights | 2015 | 2014 | Change, %(2) |
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Revenue, US$m | 1,441 | 1,690 | -15% |
Total cash cost, US$/GE oz | 538 | 634 | -15% |
All-in cash cost, US$/GE oz | 733 | 893 | -18% |
Adjusted EBITDA, US$m | 658 | 685 | -4% |
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Average realised gold price, US$/oz | 1,127 | 1,231 | -8% |
Average realised silver price, US$/oz | 14.7 | 17.7 | -17% |
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Net earnings/(loss) for the year, US$m | 221 | (210) | NM |
Underlying net earnings, US$m | 296 | 282 | +5% |
Return on Assets, % | 17% | 13% | +4% |
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Underlying EPS, US$/share | 0.70 | 0.71 | -1% |
Dividend declared during the period, US$/share(3) | 0.51 | 0.36 | +42% |
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Net debt, US$m | 1,298 | 1,249 | +4% |
Net debt/Adjusted EBITDA | 1.97 | 1.82 | +8% |
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Net operating cash flow, US$m | 490 | 518 | -5% |
Capital expenditure, US$m | 205 | 210 | -2% |
Free cash flow, US$m(4) | 263 | 306 | -14% |
Notes: |
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1) Given the persistent change in gold/silver market price ratio, Polymetal has decided to change the gold/silver ratio used in presenting gold equivalent (GE) production from 1/60 to 1/80. The comparative numbers for prior periods and production guidance were restated accordingly in this release. 2) 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 tables in this release. 3) FY 2015: final dividend for FY 2014 declared in May 2015, interim dividend for the 1H 2015 declared in September 2015, and special dividend declared in December 2015. FY 2014: final dividend for FY 2013 declared in May 2014, interim dividend for the 1H 2014 declared in September 2014, and special dividend declared in December 2014. 4) Free cash flow is defined as net cash flows from operating activities less cash flows used in investing activities (excluding acquisition costs in business combinations and investments in associates and joint ventures). 5) NM = not meaningful. | |||
PRESENTATION AND WEBCAST
Polymetal will hold a conference call and webcast on Tuesday, March 29, 2016 at 15:30 am London time (17:30 pm Moscow time).
8 10 800 204 140 11 access code 840470# (free from Russia), or
+44 (0) 20 3367 9462 (free from the UK), or
+1 855 402 7761 (free from the US), or
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=3453
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=3453. A recording of the call will be available immediately after the call at +44 20 3367 9460 (from within the UK), +1 87 7642 3018 (from within the US) and +7 495 745 7948 (from within Russia), access code 300076#, from 17:30 Moscow time Tuesday, March 29, till 17:30 Moscow time Tuesday, April 5, 2016.
Please find full version of the press release in the attachment.
Enquiries
| Media | Investor Relations | ||
FTI Consulting Leonid Fink Jenny Payne | +44 20 3727 1000 | Polymetal Maxim Nazimok Evgenia Onuschenko Maryana Nesis | ir@polymetalinternational.com
+7 812 313 5964 (Russia) +44 20 7016 9503 (UK) |
| Joint Corporate Brokers | |||
Morgan Stanley Sam McLennan Richard Brown | +44 20 7425 8000 | RBC Europe Limited Tristan Lovegrove Jonny 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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