REG-Polymetal International plc Polymetal International plc: Half-yearly report for the six months ended 30 June 2019

Polymetal International PKAnnouncement

27/08/2019 07:00

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 Polymetal International plc (POLY)
 Polymetal International plc: Half-yearly report for the six months ended 30
 June 2019

 27-Aug-2019 / 08:56 MSK
 Dissemination of a Regulatory Announcement, transmitted by EQS Group.
 The issuer is solely responsible for the content of this announcement.

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 Release time IMMEDIATE               LSE, MOEX, AIX: POLY / ADR: AUCOY
 Date         27 August 2019

  

 Polymetal International plc

 Half-yearly report for the six months ended 30 June 2019

  

  

 "Our strong earnings during the period reflect solid operational delivery, and
 most notably excellent results from Kyzyl", said Vitaly Nesis, Group CEO,
 commenting on the results. "Traditionally, we expect seasonally lower costs,
 higher production and materially stronger cash flow generation in the second
 half of the year, allowing us to meet our full year cost and production
 guidance".

 FINANCIAL HIGHLIGHTS

   • Revenue in 1H 2019 increased by 20% to US$ 946 million compared to 1H  2018
     ("year-on-year"), primarily  driven  by  gold  equivalent  (GE)  production
     growth of 22%. Gold sales were  604 Koz, up 36% year-on-year, while  silver
     sales were down 15% to 10.3  Moz, in line with production volume  dynamics.
     Average realised  prices  largely  tracked  market  dynamics:  gold  prices
     achieved were broadly flat year-on-year, while silver prices were down 7%.
   • Group Total cash costs  ("TCC")1 were US$  667/GE oz for  1H 2019, down  3%
     year-on-year, and  3%  above  the  Company's  full  year  guidance  of  US$
     600-650/GE oz owing  to the  seasonality of sales.  All-in sustaining  cash
     costs ("AISC")1 amounted to  US$ 904/GE oz,  increasing by 1%  year-on-year
     due to one-off  investments at  Varvara (locomotive and  mining fleet)  and
     Dukat (scheduled tailings storage facility upgrade). Both cost metrics  are
     expected to  decline  in  the second  half  of  the year  on  the  back  of
     seasonally higher production, notably at Svetloye and Mayskoye, and due  to
     a closer alignment of sales to production at Dukat and Kyzyl.
   • Adjusted EBITDA 1  1  was US$ 403 million, an increase of 34% year-on-year,
     mostly driven  by higher  production volumes.  The Adjusted  EBITDA  margin
     increased by 5 p.p. to 43%  (1H 2018: 38%), reflecting a successful  launch
     and ramp-up of Kyzyl delivering at full capacity during the period.
   • Net earnings 2  2  were US$ 153 million versus US$ 175 million in 1H  2018,
     mostly  impacted  by   the  foreign  exchange   loss  on  USD   denominated
     intercompany loans between entities  with different functional  currencies.
     Underlying net earnings1 increased by 21% to US$ 188 million (1H 2018:  US$
     155 million) on the back of higher operating profit.
   • A final dividend for 2018 of US$ 0.31 per share (total of  US$ 146 million)
     was paid in May 2019. An interim  dividend of US$ 0.20 per share (1H  2018:
     US$ 0.17 per share) representing 50% of the Group's underlying net earnings
     for 1H 2019 has been approved by the Board in accordance with the  dividend
     policy, while complying  with the  hard ceiling of  2.5x Net  debt/Adjusted
     EBITDA .
   • Net debt1 increased  to US$ 1,698 million  during the  period (31  December
     2018: US$ 1,520 million), representing 1.92x of last twelve months Adjusted
     EBITDA, driven by  a seasonal working  capital increase and  payment of  FY
     2018 final dividend.  Seasonally higher  production and  a working  capital
     drawdown are expected  to drive stronger  free cash flow  generation in  2H
     2019.
   • Polymetal remains on track to meet its 2019 production guidance of 1.55 Moz
     of gold equivalent.  TCC and AISC  are expected to  be within the  guidance
     range of  US$  600-650/GE oz  and  US$ 800-850/GE  oz,  respectively.  This
     guidance remains contingent on the RUB/USD and KZT/USD exchange rates  that
     have a  significant  effect  on  the  Group's  local  currency  denominated
     operating costs.

  

 Financial highlights 3  3  4  4                   1H 2019   1H 2018   Change, %
                                                                            
 Revenue, US$m                                       946       789       +20%
 Total cash cost, US$/GE oz                          667    689 5  5      -3%
 All-in sustaining cash cost, US$/GE oz              904       898        +1%
 Adjusted EBITDA, US$m                               403       300       +34%
                                                                            
 Average realised gold price, US$/ oz               1,332     1,313       +1%
 Average realised silver price, US$/ oz             15.2      16.4        -7%
                                                                            
 Net earnings, US$m                                  153       175       -13%
 Underlying net earnings, US$m                       188       155       +21%
 Return on Assets, %                                 14%       13%        +1%
 Return on Equity (underlying),%                     13%       12%        +1%
                                                                            
 Basic EPS, US$/share                               0.33      0.40       -18%
 Underlying EPS, US$/share                          0.40      0.35       +14%
 Dividend declared during the period,               0.31      0.30        +3%
 US$/share 6  6 
 Dividend proposed for the period, US$/share        0.20      0.17       +18%
                                                                            
 Net debt, US$m                                     1,698  1,520 7  7    +12%
 Net debt/Adjusted EBITDA 8  8                      1.92      1.95        -1%
                                                                            
 Net operating cash flow, US$m                       127       93        +37%
 Capital expenditure, US$m                           189       169       +12%
 Free cash flow, US$m                               (63)      (64)     NM 9  9 
 Free cash flow post-M&A, US$m                      (23)      (91)        NM

  

  

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  10  1  The  financial  performance  reported by  the  Group  contains  certain
 Alternative Performance Measures (APMs)  disclosed to complement measures  that
 are defined  or specified  under  International Financial  Reporting  Standards
 (IFRS). For  more  information  on  the  APMs  used  by  the  Group,  including
 justification for  their  use, please  refer  to the  "Alternative  performance
 measures" section below.

  11  2  Profit for the financial period.

  12  3  Totals may not  correspond to 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.

  13  4  For more information on the APMs used by the Group refer to the
 "Alternative performance measures" section below.

  14  5  Restated on Dukat's TCC including the effect of concentrate treatment
 charges. Previously reported TCC for 1H 2018 were US$ 683/GE oz.

  15  6  1H 2019: Final dividend  for FY 2018 paid in  May 2019. 1H 2018:  Final
 dividend for FY 2017 paid in May 2018.

  16  7  As at 31 December 2018.

  17  8  On a last twelve months basis. Adjusted EBITDA for 2H 2018 was US$  475
 million.

  18  9  NM - Not meaningful.

 Please find the full PDF version of the announcement at the link at the bottom
 of the page.

 Conference call and webcast

 Polymetal will hold a conference call and webcast on Tuesday, 27 August 2019 at
 12:00 London time (14:00 Moscow time).

 To participate in the call, please dial:

 8 800 500 98 63 access code 23612986# (free from Russia), or

 44 203 009 24 83 (free from the UK), or

 1 646 502 51 26 (free from the US), or 

 follow the link:  19 https://webcasts.eqs.com/polymetal20190827

 Please be prepared to introduce yourself to the moderator or register.

 Webcast    replay    will     be    available     on    Polymetal's     website
 ( 20 www.polymetalinternational.com)                   and                   at
  21 https://webcasts.eqs.com/polymetal20190827. A recording of the call will be
 available immediately after the call at +44 20 3364 5147 (from within the  UK),
 +1 646  722 4969  (from within  the USA)  and +7  495 249  16 71  (from  within
 Russia), access code  418870681#, from  14:30 Moscow time  Tuesday, 27  August,
 till 14:30 Moscow time Tuesday, 3 September, 2019.

 Enquiries

     Media            Investor Relations
 FTI              Polymetal                     22 ir@polymetalinternational.com
 Consulting
            +44   Eugenia Onuschenko           +44 20 7016 9505 (UK)
 Leonid     20
 Fink       3727  Timofey Kulakov               
            1000
 Viktor           Kirill                       +7 812 334 3666 (Russia)
 Pomichal         Kuznetsov                   
     Joint
     Corporate         
     Brokers
 Morgan
 Stanley    +44
            20
 Andrew     7425
 Foster     8000

 Richard          RBC Europe Limited
 Brown
                  Marcus Jackson               +44 20 7653 4000
 Panmure
 Gordon           Jamil Miah

 Charles    +44
 Lesser     20
            7886
 James      2500
 Stearns

  

 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.

  

  

  

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 Attachment

 Document title: Full version of the 1H 2019 report
 Document:  23 http://n.eqs.com/c/fncls.ssp?u=XUJDFHFFVB

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   ISIN:          JE00B6T5S470
   Category Code: IR
   TIDM:          POLY
   Sequence No.:  18063
   EQS News ID:   863257


    
   End of Announcement EQS News Service

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    24 fncls.ssp?fn=show_t_gif&application_id=863257&application_name=news&site_id=reuters8

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