Petropavlovsk's 2012 revenues rise, profits fall

Petropavlovsk achieved a rise in annual revenues on the back of increased gold sales and production, the mining company announced Thursday.

Group revenue for 2012 grew by circa 9.0% year-on-year to $1.4bn as gold production rose 13% to 710,400oz, exceeding the 700,000oz target. Gold sales were up 4.0% to 703,200z.

However, earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $487.7m from $597.1m as a result of operational costs, higher interest rate charges and increase depreciation from commissioning of new production facilities.

The company reported a net loss of $243.9m, compared to the prior year's profit of $240.5m.

"Significant increases in input costs have been an industry-wide phenomenon in 2012 and for us the effect was compounded by scheduled lower grades, increased stripping costs and temporarily reduced recoveries related to processing transitional ore types," Chairman Peter Hambro, said.

"We are pleased to report however that we managed to offset some of these cost increases by containing mining and processing costs, which on average were slightly better than in the previous year."

Results were also hit by total cash costs on a dollar per ounce basis which increased from $740 per oz in the first half to $855 per oz in the second half of 2012.

Impairments were another factor affecting total profits. Hambor said a $26.9m net loss on disposals of a number of non-core, a $197.9m fair value write-down of IRC Limited's net assets and $21m of other impairments and a$109.5m impairment of Yamal and other non-core assets took their toll.

The company expects a transformational year ahead with the construction of new facilities and increased production.

RD