Mining company Polymetal International has posted a 41 per cent rise in half-year revenue, largely driven by a strong increase in gold equivalent sold and the average realised gold price.
Revenue for the period rose to $767m from $545 the same period the previous year, boosting pre-tax profits from $210.7m to $220.8m, aided by a decline in capital expenditure, from $215m to $171m, but partly offset by an increase in the total cost of sales, up 32% from £261m to £346m.
Earnings before interest, tax, depreciation and amortisation (EBITDA) soared 53% to $380m from $249 in the first half of 2011, while the EBITDA margin increased to 49.6% from 45.7%.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Get 6 issues free
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
During the period the firm prodcued 501,000 oz gold equivalent, up 48% from 338,000 the same period the year before, while 467,000 oz were sold, up 23% from 379,000 oz sold the corresponding period in 2011. The firm believes it is firmly on track to deliver its full-year target of more than one million ounces of gold equivalent, boosted by a stronger-than-expected performance at both the Dukat and Khakanja mines.
The average realised price of gold rose 14% from $1,434 to $1,639 per ounce, while the average realised price of silver dropped 15% from $34.8 to $29.5 per ounce. Gold contributed to 48% of the revenue (2011 H1: 50%), while silver accounted for 48% ((2011 H1: 48%).
Cash at the end of the period fell from $33m to $26m year-on-year.
"We have demonstrated strong financial performance on the back of excellent production results in the first half of the year. Our key growth projects, Omolon and Albazino/Amursk, have started to pay off and have made a meaningful contribution to the company's financial results. This was supported by stable production and cost performance at our mature operations", said Vitaly Nesis, Chief Executive Officer.
"I believe that the current US dollar exchange rate dynamics, which had an impact on our bottom-line performance in the first half of the year, will in turn favourably affect our cost base towards the year-end. We expect that our performance in the second half of the year will be driven by continued revenue growth from our new operations, decrease in working capital, and robust cost performance, allowing us to meet shareholder expectations," he added.
The interim dividend was started at $0.20 per share.
The share price rose 1.48% to 991p by 08:15.
NR
RICS: homebuyers are returning after stamp duty shock
Reducing cash ISA limit will make lending difficult and expensive, warn providers
