Polymetal: Preliminary results for the year ended 31 December 2019 (989055)
04 Marzo 2020 - 1:00AM
UK Regulatory
Polymetal International plc (POLY)
Polymetal: Preliminary results for the year ended 31 December 2019
04-March-2020 / 10:00 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Release time IMMEDIATE LSE, MOEX, AIX: POLY / ADR: AUCOY
Date 04 March 2020
Polymetal International plc
Preliminary results for the year ended 31 December 2019
Polymetal International plc (LSE, MOEX: POLY, ADR: AUCOY) (together with its
subsidiaries - "Polymetal", the "Company", or the "Group") is pleased to
announce the Group's preliminary results for the year ended 31 December
2019.
"We are pleased to report record earnings and solid free cash flow for the
year underpinned by a robust operating performance and strong commodity
prices", said Vitaly Nesis, Group CEO of Polymetal, commenting on the
results. "We have also advanced our key strategic projects, reduced net debt
and paid substantial dividends".
FINANCIAL HIGHLIGHTS
? In 2019, revenue increased by 19%, totalling US$ 2,246 million (2018:
US$ 1,882 million). Average realised gold and silver prices followed
market dynamics and increased by 13% and 11%, respectively. Gold sales
were 1,366 Koz, up 14% year-on-year, while silver sales were down 14% to
22.1 Moz, in line with production volume trends and further supported by
working capital release.
? Group Total cash costs[1] (TCC) for the full year were stable compared
to 2018 at US$ 655/GE oz, 1% above the Group's guidance of US$ 600-650/GE
oz owing to higher domestic diesel prices and higher royalties. All-in
sustaining cash costs1 (AISC) were broadly unchanged from 2018 at US$
866/GE oz, 2% above the Group's guidance of US$ 800-850/GE oz, driven by
the same factors.
? Polymetal posted record Adjusted EBITDA1 of US$ 1,075 million, a 38%
increase over 2018, against the backdrop of higher production volumes,
higher commodity prices, and stable costs. Adjusted EBITDA margin reached
48% (2018: 41%).
? Net earnings[2] were a record US$ 483 million (2018: US$ 355 million),
with basic EPS of US$ 1.02 per share (2018: US$ 0.78 per share).
Underlying net earnings1 increased by 31% to US$ 586 million on the back
of higher operating profit.
? Capital expenditure was US$ 436 million[3], up 27% compared to US$ 344
million in 2018 and above the initial guidance of US$ 380 million, mostly
due to accelerated pre-stripping and construction at Nezhda. Construction
at Nezhda is around 45% complete as of year end.
? Net debt1 decreased to US$ 1,479 million (31 December 2018: US$ 1,520
million), representing a Net debt/Adjusted EBITDA ratio of 1.38x (2018:
1.95x), well below the Group's target leverage ratio of 1.5x. The Company
continued to generate significant free cash flow1 which amounted to US$
299[4] million (2018: US$ 134 million), supported by a net cash operating
inflow of US$ 696 million (2018: US$ 513 million).
? A final dividend of US$ 0.42 per share (approx. US$ 197 million)
representing 50% of the Group's underlying net earnings for 2H 2019 has
been proposed by the Board in accordance with our dividend policy while
remaining within the Net debt/Adjusted EBITDA target of 1.5x and
comfortably below the hard ceiling ratio of 2.5x. In January 2020, the
Board also announced a special dividend of US$ 0.20 per ordinary share
(approx. US$ 94 million). This will bring the total dividend declared for
FY 2019 to US$ 385 million (2018: US$ 223 million), or US$ 0.82 per share
versus US$ 0.48 per share in 2018.
OPERATING AND ESG HIGHLIGHTS
? The Company's FY2019 GE production amounted to 1,614 Koz, an increase of
3% over 2018 and 4% above the original production guidance of 1.55 Moz. A
strong contribution from Kyzyl more than compensated for asset disposals
while the rest of the portfolio continued to demonstrate stable results.
Production from continuing operations grew by 14% year-on-year to 1,609
Koz GE.
? Full year gold production totalled 1,316 Koz, a 8% increase
year-on-year, while silver output decreased by 15% on the back of asset
disposals and planned grade decline at Dukat.
? Safety performance in 2019 deteriorated both in terms of frequency of
lost-time injuries and the number of fatalities. The Board approved
significant safety-related changes to the remuneration structure for all
levels of the Company management together with a comprehensive action plan
focused on impacting behaviors and attitudes of employees.
? Our operational achievements are underpinned by the value that we place
on environmental, social and governance (ESG) issues and this has
contributed to Polymetal's international recognition as a leading ESG
advocate within Russia and the CIS. In 2019, the Company was reaffirmed as
a member of the Dow Jones Sustainability and FTSE4Good indices, MSCI ESG
Ratings score improved from BBB to A.
2020 OUTLOOK
? The Company reiterates its current production guidance of 1.6 Moz of GE
for each of FY2020 and 2021. Traditionally, production in both years will
be weighted towards 2H due to seasonality.
? TCC in 2020 is expected to be in the range of US$ 650-700/GE oz while
AISC is expected at US$ 850-900/GE oz. The expected increase over 2019
cost levels is driven by the appreciation of the Russian rouble and
increased domestic diesel fuel prices compared to 2019, as well as
increased royalties on the back of continued strong gold and silver price
performance. The guidance remains contingent on the Rouble/Dollar exchange
rate and oil price.
Financial highlights[5] 2019 2018 Change, %
Revenue, US$m 2,246 1,882 +19%
Total cash cost, US$ /GE oz 655 654[6] 0%
All-in sustaining cash cost, US$ /GE oz 866 8642 0%
Adjusted EBITDA, US$m 1,075 780 +38%
Average realised gold price, US$ /oz[7] 1,411 1,253 +13%
Average realised silver price, US$ /oz3 16.5 14.8 +11%
Net earnings, US$m 483 355 +36%
Underlying net earnings, US$m 586 447 +31%
Return on Assets[8], % 20% 17% +3%
Return on Equity (underlying)4, % 19% 16% +3%
Basic EPS, US$ /share 1.02 0.78 +31%
Underlying EPS, US$ /share 1.25 1.00 +26%
Dividend declared during the period, US$ 0.51 0.47 +9%
/share[9]
Dividend proposed for the period, US$ 0.82 0.48 +71%
/share[10]
Net debt, US$m 1,479 1,520 -3%
Net debt/Adjusted EBITDA 1.38 1.95 -29%
Net operating cash flow, US$m 696 513 +36%
Capital expenditure, US$m 436 344 +27%
Free cash flow[11], US$m 256 176 +45%
Free cash flow post-M&A[12], US$m 299 134 +122%
CONFERENCE CALL AND WEBCAST
The company will hold a conference call and webcast on Wednesday, 4 March
2020 at 11:00 London time (14:00 Moscow time).
To participate in the call, please dial:
From the UK:
+44 208 089 2860 (local access)
0800 756 3333 (toll free)
From the US:
+1 334 777 6978 (local access)
800 367 2403 (toll free)
From Russia:
+7 499 609 1260 (local access)
8 800 100 3687 (toll free)
To participate from other countries, please dial any of the local access
numbers listed above.
Conference code: 2522219
To participate in the webcast follow the link:
https://webcasts.eqs.com/polymetal20200304. Please be prepared to introduce
yourself to the moderator or register.
A recording of the call will be available immediately after the call at +44
207 660 0134 (from the UK), +1 719 457 0820 (from the USA) and 8 10 800 2702
1012 (from Russia), access code 2522219, from 17:30 Moscow time Wednesday,
04 March, till 17:30 Moscow time Wednesday, 11 March, 2020. Webcast replay
will be available on Polymetal's website (www.polymetalinternational.com
[1]) and at https://webcasts.eqs.com/polymetal20200304.
Enquiries
Media Investor Relations
FTI +44 20 3727 Polymetal ir@polymetalinternational.com
Consulting 1000
Evgeny +44 20 7887 1475 (UK)
Leonid Fink Monakhov
Viktor Timofey
Pomichal Kulakov
+7 812 334 3666 (Russia)
Kirill
Kuznetsov
Joint Corporate Brokers
Morgan +44 20 7425 RBC +44 20 7653 4000
Stanley 8000 Europe
Limited
Andrew
Foster Marcus
Jackson
Richard
Brown Jamil
Miah
Panmure
Gordon +44 20 7886
2500
James
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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[1] The financial performance reported by the Group contains certain
Alternative Performance Measures (APMs) disclosed to compliment 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. The definition and calculation of
non-IFRS APMs used in this report, including Adjusted EBITDA, Total cash
costs, All-in sustaining cash costs, Underlying net earnings, Net debt and
Free cash flow are explained in the "Financial Review" section below.
[2] Profit for the financial period.
[3] On a cash basis, representing cash outflow on purchases of property,
plant and equipment in the consolidated statement of cash flows.
[4] After assets disposal and acquisition.
[5] 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.
[6] Restated in respect of Dukat's TCC for 2018 to include the concentrate
treatment charges by the third-party offtakers.
[7] Excluding effect of treatment charges deductions from revenue.
[8] Defined in the "Alternative performance measures" section below.
[9] FY 2019: final dividend for FY 2018 declared in May 2019 and interim
dividend for the 1H 2019 declared in September 2019. FY 2018: final dividend
for FY 2017 declared in May 2018 and interim dividend for the 1H 2018
declared in September 2018.
[10] FY 2019: interim, final and special dividend for FY2019. FY 2018:
interim and final dividend for FY2018.
[11] Net cash generated by operating activities less net cash used in
investing activities excluding acquisitions of joint venture and associate,
loans forming part of net investment in joint ventures and proceeds from
disposal of subsidiaries.
[12] Free cash flow including cash used in/received from
acquisition/disposal of assets and joint ventures.
Attachment
Document title: Preliminary results for the year ended 31 December 2019
Document: http://n.eqs.com/c/fncls.ssp?u=VOWUKYNNGP [2]
ISIN: JE00B6T5S470
Category Code: FR
TIDM: POLY
Sequence No.: 50283
EQS News ID: 989055
End of Announcement EQS News Service
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2: https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=13f0f4561790ebd01eccfc6ce9fa152f&application_id=989055&site_id=vwd&application_name=news
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March 04, 2020 02:00 ET (07:00 GMT)
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