Polymetal International plc (POLY)
Polymetal: Half-year report for the six month ended 30 June 2023
25-Sep-2023 / 07:55 MSK
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Release time IMMEDIATE AIX, MOEX: POLY
Date 25 September 2023
Polymetal International plc
Half-year report for the six month ended 30 June 2023
"Despite external pressures, we made good progress in the first
half of the year while adapting to the logistics constraints. High
commodity prices against a weakening Rouble, combined with steady
operating performance, drove a healthy growth in the Group's
earnings, adjusted EBITDA and free cash flow. We expect stronger
production, stable cash costs within the original guidance, and
significant free cash flow generation for the second half of the
year, while remaining focused on progressing our development
projects on schedule", said Vitaly Nesis, Group CEO of Polymetal
International plc, commenting on the results.
FINANCIAL HIGHLIGHTS
-- In 1H 2023, revenue increased by 25% year-on-year (y-o-y),
totalling USUSD 1,315 million (1H 2022: USUSD1,048 million), of
which USUSD 393 million (30%) was generated from operations in
Kazakhstan and USUSD 922 million(70%) from operations in the
Russia. Average realised gold and silver prices tracked market
dynamics: gold priceincreased by 3% while silver price remained
flat y-o-y. Gold equivalent ("GE") production was 764 Koz, a
3%increase y-o-y. Gold sales increased by 25% y-o-y to 570 Koz,
while silver sales increased by 19% to 10.4 Moz. TheCompany
recorded a sales-production gap, notably for Kyzyl, as a result of
persistent railway issues at theeastward direction. This gap is
expected to be closed by the year end as the Company is gradually
adjusting itstransportation routes.
-- Group Total Cash Costs ("TCC")[1] for 1H 2023 were USUSD
944/GE oz, below the lower end of the Group'sfull-year guidance of
USUSD 950-1,000/GE oz, while being up 11% y-o-y, mostly due to a
planned grade decline combinedwith domestic inflation, which was
partially offset by weaker currency as well as increase in sales
volumesresulting in spread of fixed costs over a larger amount of
ounces sold.
-- All-in Sustaining Cash Costs ("AISC")1 remained broadly
unchanged at USUSD 1,386/GE oz, up 1% y-o-y, andwithin the
full-year guidance range of USUSD 1,300-1,400/GE, reflecting the
decrease in capitalised stripping on theback of completed stripping
campaigns.
-- Adjusted EBITDA1 was USUSD 559 million, an increase of 31%
y-o-y, driven by higher sales volumes. Of this,USUSD 200 million
(36%) was earned from operations in Kazakhstan, achieving a margin
of 51%, and USUSD 359 million(64%), or a margin of 39%, earned from
operations in the Russian Federation.The Adjusted EBITDA margin
increased by2 percentage points to 43% (1H 2022: 41%).
-- Underlying net earnings[2] increased by 28% to USUSD 261
million (1H 2022: USUSD 203 million). Net earnings[3] were USUSD
190 million (1H 2022: USUSD 321 million loss due to one-off
impairment charges).
-- Capital expenditures were USUSD 375 million[4], largely
unchanged compared with USUSD 373 million in 1H 2022.The Company
currently expects its FY2023 capex to be in the original guidance
range of USUSD 700-750 million.
-- Net operating cash inflow was USUSD 35 million (1H 2022:
USUSD 405 million outflow). This includes positivecash flow of
USUSD 140 million from operations in Kazakhstan and negative cash
flow of USUSD 105 million fromoperations in the Russian Federation.
The Group reported negative free cash flow1 of USUSD 341 million,
which isstill a significant improvement over 1H 2022 negative FCF
of USUSD 630 million, that is made up of USUSD 55 millioninflow
coming from Kazakhstan and USUSD 396 million outflow attributable
to Russian assets. As usual, free cash flowis expected to be
stronger in the second half of the year due to seasonally higher
production and working capitalrelease.
-- Net debt1 increased to USUSD 2,590 million during the period
(31 December 2022: USUSD 2,393 million),representing 2.25x of the
LTM Adjusted EBITDA (2022: 2.35x). The increase in net debt was
mainly driven by theworking capital build-up.
-- Polymetal is on track to meet its original 2023 production
guidance of 1.7 Moz of gold equivalent. Thecompany maintains its
2023 guidance range of USUSD 950-1,000/GE oz and USUSD
1,300-1,400/GE oz for TCC and AISC,respectively. This guidance
remains contingent on the RUB/USD and KZT/USD exchange rates which
have a significanteffect on the Group's local currency denominated
operating costs.
Financial highlights [5] 1H 2023 1H 2022 Change
Revenue, USUSDm 1,315 1,048 +25%
Total cash cost[6], USUSD /GE oz 944 853 +11%
All-in sustaining cash cost2, USUSD /GE oz 1,386 1,371 +1%
Adjusted EBITDA2, USUSDm 559 426 +31%
Average realised gold price[7], USUSD /oz 1,926 1,864 +3%
Average realised silver price3, USUSD /oz 22.9 22.9 0%
Net earnings/(loss), USUSDm 190 (321) n/a
Underlying net earnings2, USUSDm 261 203 +28%
Return on Assets2, % 10% 7% +3%
Return on Equity (underlying)2, % 13% 10% +3%
Basic earnings/(loss) per share, USUSD 0.40 (0.68) n/a
Underlying EPS2, USUSD 0.55 0.43 +28%
Net debt2, USUSDm 2,590 2,393[8] +8%
Net debt/Adjusted EBITDA 2.25[9] 2.355 -4%
Net operating cash flow, USUSDm 35 (405) n/a
Capital expenditure, USUSDm 375 373 0%
Free cash flow2, USUSDm (341) (630) +46%
Free cash flow post-M&A2, USUSDm (344) (658) +48%
OPERATING HIGHLIGHTS
-- No fatal accidents occurred among the Group's workforce and
contractors in H1 2023 (consistent with H12022). Lost time injury
frequency rate (LTIFR) among the Group's employees stood at 0.11
(0.08 in H1 2022), asthere were seven lost-time accidents, mostly
related to falling or being hit by an object. None of the
accidentswere within Kazakhstan operations.
-- GE output for H1 was up by 3% y-o-y to 764 Koz, including 213
Koz in Kazakhstan and 551 Koz in Russia. The Company reiterates its
full-year production guidance of 1.7 Moz of GE (1.2 Moz in Russia
and 500 Koz inKazakhstan).
1H 2023 1H 2022 Change
PRODUCTION (Koz of GE1)
Kazakhstan 213 244 -13%
Kyzyl 128 135 -5%
Varvara 86 109 -22%
Russia 551 500 +10%
TOTAL 764 744 +3%
REVENUE (USUSDm)
Kazakhstan 393 443 -11%
Russia 922 605 +52%
TOTAL 1,315 1,048 +25%
NET DEBT2 (USUSDm)
Kazakhstan 201 277 -27%
Russia 2,389 2,117 +13%
Total 2,590 2,393 +8%
SAFETY
LTIFR3 (Employees) 0.11 0.08 +36%
Fatalities 0 0 n/a
Notes:
(1) Based on 80:1 Au/Ag conversion ratio and excluding base
metals. Discrepancies in calculations are due to rounding.
(2) Comparative information is presented for 31 December
2022.
(3) LTIFR = lost time injury frequency rate per 200,000 hours
worked. Company employees only are taken into account.
update on THE re-domICILATION AND listing
On 7 August 2023, the Company successfully completed its
re-domiciliation to the AIFC (Kazakhstan). On 10 August, trading
resumed on Astana International Exchange, which is now the primary
listing venue for Polymetal. Cancellation of the Company's listing
from the London Stock Exchange completed on 29 August 2023. On 19
September 2023, trading in Polymetal shares also resumed on the
Moscow Exchange.
Conference call and webcast
The Company will hold a webcast on Monday, 25 September 2023, at
9:00 London time (14:00 Astana time).
To participate in the webcast, please register using the
following link: https://event.on24.com/wcc/r/4340529/
E960C65B2522657D1D7187BD73EFDBF4.
Webcast details will be sent to you via email after
registration.
Enquiries
Investor Relations
Polymetal International plc ir@polymetalinternational.com
Evgeny Monakhov +44 20 7887 1475 (UK)
Kirill Kuznetsov +7 7172 476 655 (Kazakhstan)
Media
Polymetal International plc media@polymetal.kz
Ainur Baigozha +7 7172 476 655 (Kazakhstan)
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 File: Polymetal International plc: Half-year report
for the six month ended 30 June 2023
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Dissemination of a Regulatory Announcement, transmitted by EQS
Group. The issuer is solely responsible for the content of this
announcement.
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ISIN: JE00B6T5S470
Category Code: IR
TIDM: POLY
LEI Code: 213800JKJ5HJWYS4GR61
OAM Categories: 1.2. Half yearly financial reports and audit reports/limited reviews
Sequence No.: 273452
EQS News ID: 1732931
End of Announcement EQS News Service
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(END) Dow Jones Newswires
September 25, 2023 00:55 ET (04:55 GMT)
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