24 Aug 2016 07:00
Release time |
IMMEDIATE |
Date | 24 August 2016 |
Polymetal International plc
Half-yearly report for the six months ended 30 June 2016
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 30 June 2016.
FINANCIAL HIGHLIGHTS
· Revenue in 1H 2016 decreased by 8% to US$ 593 million compared to 1H 2015 ("year-on-year") following the planned production decline. The volumes of gold and silver sold were down 10% and 7% year-on-year respectively, with gold equivalent sold lower by 10% at 484 Koz. Average realised gold and silver prices were largely unchanged from 1H 2015.
· Group Total cash costs ("TCC")1 were US$ 514 per gold equivalent ounce ("GE oz"), down 3% compared to 2H 2015 ("half-on-half") and down 7% year-on-year on the back of strong operational performances at Dukat, Voro and Albazino. This was combined with weaker average Russian Rouble exchange rate against the US Dollar, which offset the combined negative impact of domestic inflation and planned decline in average grades processed at Okhotsk and Omolon.
· All-in sustaining cash costs ("AISC")1 amounted to US$ 754/GE oz, a decrease of 4% year-on-year, driven by a reduction in TCC during the period, while per ounce sustaining capital and exploration expenditure at the operating mines remained almost flat compared to 1H 2015.
· Adjusted EBITDA1 was US$ 294 million, a decrease of just 1% year-on-year despite the revenue decline which was offset by a strong cost performance. The Adjusted EBITDA margin was 50% compared to 46% in 1H 2015.
· Net earnings2 were US$ 164 million versus US$ 98 million in 1H 2015. Underlying net earnings (adjusted for the after-tax amount of impairment charges/reversals, forex exchange gains/losses and change in fair value of contingent consideration liability) were US$ 124 million (1H 2015: US$ 117 million).
· Regular dividends for 2015 of US$ 0.13 per share (total of US$ 55 million) were paid in May 2016, in accordance with Polymetal's dividend policy. An interim dividend of US$ 0.09 per share (1H 2015: US$ 0.08 per share) representing 30% of the Group's underlying net earnings for 1H 2016 is proposed by the Board, which, in accordance with the current dividend policy, has the discretion to declare regular dividends at a Net debt/Adjusted EBITDA ratio above 1.75.
· Net debt increased to US$ 1,436 million over the period (31 December 2015: US$ 1,298 million), driven by a seasonal working capital increase, investments in Nezhdaninskoye and Kapan, and increased capital expenditure with the start of Kyzyl construction. Stronger production and a traditional seasonal working capital reduction should drive stronger free cash flow generation in 2H 2016.
· Polymetal remains on track to meet its 2016 production guidance of 1.26 Moz of gold equivalent at TCC of US$ 525-575/GE oz and AISC of US$ 700-750/GE oz.
· The Group reduces its full-year capital expenditure guidance from US$ 350 million to US$ 310 million (including exploration and capitalised stripping) due to favorable exchange rate dynamics.
"I am pleased to report robust earnings for the first half of the year", said Vitaly Nesis, Group CEO, commenting on the results. "With stronger production and cash flow generation expected for the second half, the Company is positioned to improve profitability and continue developing our growth pipeline while maintaining comfortable balance sheet structure".
______________________
(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 are explained in the "Financial Review" section below.
(2) Profit / (loss) for the financial period
Financial highlights(1) | 1H 2016 | 1H 2015 | Change, % |
|
|
|
|
Revenue, US$m | 593 | 648 | -8% |
Total cash cost, US$/GE oz | 514 | 552 | -7% |
All-in sustaining cash cost, US$/GE oz | 754 | 786 | -4% |
Adjusted EBITDA, US$m | 294 | 297 | -1% |
|
|
|
|
Average realised gold price, US$/ oz | 1,225 | 1,207 | +1% |
Average realised silver price, US$/ oz | 15.5 | 15.7 | -1% |
|
|
|
|
Net earnings, US$m | 164 | 98 | +67% |
Underlying net earnings, US$m | 124 | 117(2) | +6% |
Return on Assets, % | 20% | 15% | +5% |
|
|
|
|
Basic EPS, US$/share | 0.39 | 0.23 | +68% |
Underlying EPS, US$/share | 0.29 | 0.28 | +4% |
Dividend declared during the period, US$/share(3) | 0.13 | 0.13 | - |
|
|
|
|
Net debt, US$m | 1,436 | 1,298(4) | +11% |
Net debt/Adjusted EBITDA | 2.19(5) | 1.97(4) | +11% |
|
|
|
|
Net operating cash flow, US$m | 65 | 175 | -63% |
Capital expenditure, US$m | 117 | 86 | +35% |
Free cash flow (excluding acquisitions)(6), US$m | (53) | 77 | NM(7) |
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 tables in this release. (2) Underlying net earnings for 1H 2015 restated to adjust for change in fair value of contingent consideration liability. (3) 1H 2016: Final dividend for FY 2015 paid in May 2016. 1H 2015: Final dividend for FY 2014 paid in May 2015. (4) As at 31 Dec 2015. (5) Annualised. (6) 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). (7) NM = not meaningful. | |||
Conference call and webcast
Polymetal will hold a conference call and webcast on Wednesday 24 August 14:30 Moscow time (12:30 London time).
To participate in the call, please dial one of the numbers below:
Russia: 8 10 800 204 140 11 followed by the access code 79890937# (toll free from Russia), or
UK: +44 20 304 324 41 (toll free from the UK), or
USA: +1 855 402 77 61 (toll free from the US), or
Rest of the world: +44 20 304 324 41;
Or follow the link: http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=3949.
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=3949. 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 303363#, from 18:00 Moscow time Wednesday, August 24, till 18:00 Moscow time, 31 August, 2016.
Please find the full version of the press release in the attached PDF.http://www.rns-pdf.londonstockexchange.com/rns/9870H_-2016-8-24.pdf
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 Marcus Jackson | +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