Polymetal sales top $1.3bn, but broker comments may weigh -UPDATE

published 19 January 2012

Polymetal International, the newly-listed precious metals producer, saw sales revenue jump 45% in the year ended December 31st helped by 57% growth in the final three months of the year.

Sales totalled $1,339m in 2011, up from $924m the year before, with the majority of that growth owing to the strong rise in copper sales.

However, Polymetal, the fourth-largest gold producer in Russia, admitted that annual gold production was flat at 443Koz in 2011, despite a 14% increase in the fourth quarter.

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This is expected to increase to 590-640Koz in 2012 though, with the first gold pour at the POX plant on its Albazino-Amursk development project expected for March 2012.

Meanwhile, silver production rose by 15% to 19.9Moz in 2011; this is expected to increase to 21-23Moz in 2012. Copper production jumped 73% to 6.915Kt and the firm is targeting 6-7Kt this year.

"We are proud to complete 2011 with a strong finish in the fourth quarter," said Vitaly Nesis, Chief Executive Office of Polymetal.

In a research note on the sector dated January 18th analysts at Nomura commented that, "Polymetal appears fully priced at the moment, in our view. It has outperformed the sector since its London IPO and now trades on our spot P/NAV estimate of 0.9x. Although there are many positives, including the attractive growth profile, there are many delivery risks that could put this premium rating under pressure in 2012. Nomura initiates on POLY with a Reduce rating and a 1,400p target price, which is equivalent to a P/NAV of 0.9x based on our 2012 exit gold price forecast of USD 1,900/oz."

Shares were down 2.19% at 1,115p by 09:38.