Polymetal International plc (POLY) Polymetal: Half-yearly report
for the six months ended 30 June 2021 26-Aug-2021 / 09:00 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS
Group. The issuer is solely responsible for the content of this
announcement.
-----------------------------------------------------------------------------------------------------------------------
Release time IMMEDIATE LSE, MOEX, AIX: POLY / ADR: AUCOY
Date 26 August 2021
Polymetal International plc
Half-yearly report for the six months ended 30 June 2021
"We are pleased to report our strong financial performance on
the back of favourable commodity prices and steady operational
delivery during the first half of the year", said Vitaly Nesis,
Group CEO of Polymetal, commenting on the results. "We expect
stronger production, stable cash costs within the original guidance
and significant free cash flow generation for the second half and
remain focused on progressing our development projects on
schedule".
FINANCIAL HIGHLIGHTS
-- Revenue in 1H 2021 increased by 12% to USUSD 1,274 million
compared to 1H 2020 ("year-on-year") driven byhigher metal prices.
Average realised gold and silver prices tracked market dynamics and
increased by 8% and 59%,respectively. Gold equivalent ("GE")
production was 714 Koz, a marginal decrease of 1% year-on-year.
Gold salesremained stable year-on-year at 595 Koz but lagged
production by 40 Koz mainly due to concentrate in transitbuild-up
at Kyzyl. Silver sales were down 19% to 8.0 Moz, due to a lag
between silver concentrate production andsales, which is expected
to close in 2H 2021.
-- Group Total Cash Costs ("TCC")1 were USUSD 712/GE oz for 1H
2021, within the Company's guidance of USUSD700-750/GE oz, and up
12% year-on-year due to above-CPI inflation in the mining industry
and full-period impact ofCOVID-related costs, as well as planned
decline in grades processed at Kyzyl and Albazino.
-- All-in Sustaining Cash Costs ("AISC")1 amounted to USUSD
1,019/GE oz, up 16% year-on-year, reflectinginvestments at Omolon
(power complex, filtration building and mining fleet renewals) and
Kyzyl (mining fleet), aswell as accelerated stripping at Voro
(Pescherny and Saum deposits) and Omolon (Burgali deposit). AISC
are expectedto decline in the second half of the year on the back
of seasonally higher production and sales to meet the fullyear
guidance of USUSD 925-975/GE oz.
-- Adjusted EBITDA[1] was USUSD 660 million, an increase of 8%
year-on-year, driven by higher commodity pricesagainst the backdrop
of stable production. The Adjusted EBITDA margin decreased to 52%
(1H 2020: 54%).
-- Net earnings[2] were USUSD 419 million (1H 2020: USUSD 376
million), with basic EPS of USUSD 0.89 per share (1H2020: USUSD
0.80 per share), reflecting the increase in operating profit.
Underlying net earnings1 increased by 15%to USUSD 422 million (1H
2020: USUSD 368 million).
-- Capital expenditure was USUSD 375 million[3], up 55% compared
to USUSD 242 million in 1H 2020, reflecting theconstruction at
POX-2, Nezhda and Kutyn, combined with stripping at Veduga[4], Voro
and Omolon. Capital expenditurelevels were also affected by
inflationary pressures and COVID-related costs.
-- Given the continuing macroeconomic pressures, materials and
wage inflation, as well as scope changesapproved by the Board,
including costs of the feasibility study for POX-3 and acceleration
of Veduga and Prognozprojects, Polymetal revises its FY 2021 capex
guidance to USUSD 675-725 million (previously USUSD 560 million).
Theguidance for 2022-2025 will be updated during the Company's
capital markets day in November 2021.
-- An interim dividend of USUSD 0.45 per share (1H 2020: USUSD
0.40 per share) representing 50% of the Group'sunderlying net
earnings for 1H 2021 has been approved by the Board in accordance
with the dividend policy. A finaldividend for 2020 of USUSD 0.89
per share (total of USUSD 421 million) was paid in May 2021.
-- Net debt1 increased to USUSD 1,827 million during the period
(31 December 2020: USUSD 1,351 million),representing 1.05x of the
last twelve months Adjusted EBITDA, significantly and favourably
below the Group's targetleverage ratio of 1.5x. The increase in net
debt was mainly driven by accelerated capital expenditures
combinedwith seasonal working capital build-up.
-- Operating cash flow increased by 22% year-on-year to USUSD
358 million, however free cash flow ("FCF")3represented a USUSD 27
million outflow, compared to a USUSD 54 million inflow a year
earlier, driven by higher capitalexpenditure. As usual, FCF is
expected to be stronger in the second half of the year due to
seasonally higherproduction and working capital release.
-- Polymetal is on track to meet its 2021 production guidance of
1.5 Moz of gold equivalent. The companymaintains its 2021 guidance
range of USUSD 700-750/GE oz and USUSD 925-975/GE oz for TCC and
AISC, respectively. Thisguidance remains contingent on the RUB/USD
and KZT/USD exchange rates which have a significant effect on
theGroup's local currency denominated operating costs.
Financial highlights[5] 1H 2021 1H 2020[6] Change, %
Revenue, USUSDm 1,274 1,135 +12%
Total cash cost[7], USUSD/GE oz 712 638 +12%
All-in sustaining cash cost3, USUSD/GE oz 1,019 880 +16%
Adjusted EBITDA3, USUSDm 660 610 +8%
Average realised gold price[8], USUSD/oz 1,793 1,661 +8%
Average realised silver price4, USUSD/oz 26.5 16.7 +59%
Net earnings, USUSDm 419 376 +11%
Underlying net earnings3, USUSDm 422 368 +15%
Return on Assets3, % 24% 23% +1%
Return on Equity (underlying)3,% 24% 23% +1%
Basic EPS, USUSD/share 0.89 0.80 +11%
Underlying EPS, USUSD/share 0.89 0.78 +14%
Dividend declared during the period[9], USUSD/share 0.89 0.62 +44%
Dividend proposed for the period[10], USUSD/share 0.45 0.40 +13%
Net debt3, USUSDm 1,827 1,351 +35%
Net debt/Adjusted EBITDA 1.05[11] 0.80 +32%
Net operating cash flow, USUSDm 358 294 +22%
Capital expenditure, USUSDm 375 242 +55%
Free cash flow3, USUSDm (27) 54 NM[12]
Free cash flow post-M&A3, USUSDm (29) 55 NM
COVID-19 IMPACT ON THE GROUP's PERFORMANCE TO DATE
-- As of the date of this press release, there are 64 active
cases of COVID-19 among Polymetal's workforce.
-- In July 2021, the Kubaka processing plant site (Omolon hub)
suffered a significant COVID-19 outbreak.Management responded
quickly to isolate the infected individuals and evacuated those who
had symptoms or exhibitedpotentially risky pre-conditions with no
impact on production. As of the date of this press release, there
are 41active cases of COVID-19, mostly among construction and
drilling contractors.
-- Other operations and projects continue undisrupted. All
precautionary measures, including extensivetesting and observatory
periods, are maintained at all sites.
-- Voluntary vaccinations continue at the Group's sites and
offices, with 30% of employees having receivedat least one
vaccination across different mine sites.
operating AND ESG HIGHLIGHTS
-- There were no fatal accidents during the first half of the
year (consistent with H1 2020) amongPolymetal's workforce and the
Company's contractors. Unfortunately, on 18 July 2021 a drilling
contractor lost hislife at the Saum open-pit mine, part of Voro
operations.
-- LTIFR in 1H 2021 stood at 0.17 with ten lost-time injuries,
in comparison with 0.07 and four cases a yearearlier.
-- GE production in 1H 2021 was 714 Koz, down 1% year-on-year,
mostly due to the planned grade declines atKyzyl and Albazino.
Stronger production forecast in the 2H 2021 will be driven by
seasonal concentratede-stockpiling, notably at Mayskoye and Dukat.
The Group remains on track to meet its FY2021 production guidance
of1.5 Moz of gold equivalent.
-- Construction and development activities at Nezhda and POX-2
projects have progressed on schedule amidcontinued tightness in the
construction contractor market and COVID-related cross-border
travel restrictions.
-- In June 2021, Vigeo Eiris (part of Moody's ESG solutions), a
global leader in ESG assessments, data,research and analytics,
raised Polymetal's overall ESG score from 48 to 69 (out of 100)
which corresponds with theAdvanced level, the highest on the
company's ranking scale. The new score places Polymetal in second
place out of43 in the Mining & Metals sector and 22nd place in
the global ranking universe (4,939 companies).
-- In August 2021, Polymetal's MSCI ESG Rating has been upgraded
to AA from A. This places Polymetal amongthe companies with the
highest ESG Rating in the Precious Metals sector. MSCI has
highlighted Polymetal's safetyinitiatives and improvements, robust
governance structure and business ethics practices, active
engagement withlocal communities and robust approach to mitigating
the risk of dam-related incidents.
(MORE TO FOLLOW) Dow Jones Newswires
August 26, 2021 02:00 ET (06:00 GMT)
Polymetal (LSE:POLY)
Historical Stock Chart
From Mar 2024 to Apr 2024
Polymetal (LSE:POLY)
Historical Stock Chart
From Apr 2023 to Apr 2024
