Q3 Polymetal results out - currency movements and gold price strength have produced some stonking numbers - and theyve cleared their Russian inventories finally. Price unaffected on AIX - theres no liquidity but these results should help with the sale price. Theyve ascribed almost all the debt to their Russian assets so they should be close to debt free on sale of those which is being done. Conference call today at 10am UK time. The discount to its value is entirely due to political risk so if they can get anything close to the actual value of the Russian assets in their sale then the share price rerating could be spectacular, especially if they relist in the UK.
https://www.polymetalinternational.com/ ... 1-10-2023/?
Date: 31 October 2023
Polymetal International plc
Q3 2023 production results
Polymetal International plc reports production results for the third quarter ended September 30, 2023.
“In Q3, we returned to positive cash flow generation after seasonal working capital release and a decline in previously accumulated gold bullion. We continue to work on further release of unsold inventories and production in line with the guidance”, said Vitaly Nesis, Group CEO of Polymetal International plc.
HIGHLIGHTS
• There have been no fatal accidents during the first nine months of 2023 among Polymetal’s workforce and contractors (similar to 9M 2022). Lost time injury frequency rate (LTIFR) stood on par with 9M 2022 at 0.09. Nine lost-time accidents mostly related to falling or hit by an object were recorded during 9M 2023 (none in Kazakhstan) with two of them in Q3.
• In Q3, gold equivalent production (“GE”) grew by 12% year-on-year (y-o-y) to 508 Koz driven by increases within Russian operations (Urals, Mayskoye and Dukat).
• GE output for the first nine months of 2023 was up by 6% y-o-y to 1,272 Koz, including 340 Koz in Kazakhstan and 932 Koz in Russia.
• Concentrate inventories at Kyzyl and inventories in Russia have been unwound materially during Q3. The Company recorded a materially lower sales-production gap versus the previous quarter. Sales volumes for the first nine months of 2023 amounted to 1.1 Moz of GE. New challenges facing sales from Russia include sale of silver bullion (instead of concentrate) and significant tightening of concentrate exports regulations.
• Revenue for the reporting quarter and nine months increased by 17% and 22% y-o-y to US$ 834 and US$ 2,149 million respectively on the back of sales volumes recovery and higher metal prices.
• EBITDA for the first nine months of 2023 reached US$ 995 million representing a margin of 46% (US$ 301 million in Kazakhstan, US$ 694 million in Russia). A y-o-y increase of 60% is attributable to revenue growth and exchange rate driven operating costs decrease in Russia.
• Net Debt decreased by 10% quarter-on-quarter and stood at US$ 2.33 billion (US$ 0.12 billion in Kazakhstan and US$ 2.21 billion in Russia) as the Company generated positive free cash flow supported by seasonal factor and inventories release, as well as enjoyed lower costs and lower value of Rouble-denominated debt due to favorable exchange rate movements.
• Polymetal is on track to meet its full-year production guidance of 1.7 Moz of GE (1.2 Moz in Russia and 500 Koz in Kazakhstan). TCC and AISC guidance of US$ 950-1,000/GE oz and US$ 1,300-1,400/GE oz respectively is also maintained. The estimate remains contingent on the RUB/USD and KZT/USD exchange rates which have a significant effect on the Group’s local currency denominated operating costs.
HIGHLIGHTS
3 months ended September 30, %
change 9 months ended September 30, %
change
2023 2022 2023 2022
PRODUCTION (Koz of GE) 1
Kazakhstan 127 133 -5% 340 377 -10%
Kyzyl 84 82 +2% 212 217 -2%
Varvara 43 51 -16% 128 160 -20%
Russia 381 321 +19% 932 821 +14%
TOTAL 508 454 +12% 1,272 1,198 +6%
SALES (Koz of GE)
Kazakhstan 110 108 +2% 310 347 -11%
Russia2 336 321 +5% 826 641 +29%
TOTAL 446 429 +4% 1,136 988 +15%
REVENUE3 (US$m)
Kazakhstan 209 181 +15% 602 624 -4%
Russia 626 533 +17% 1,547 1,138 +36%
TOTAL 834 714 +17% 2,149 1,762 +22%
EBITDA3 (US$m)
Kazakhstan 101 93 +9% 301 354 -15%
Russia 335 101 +232% 694 266 +161%
TOTAL 436 194 +125% 995 620 +60%
NET DEBT4 (US$m)
Kazakhstan 120 201 -41% 120 277 -57%
Russia 2,206 2,389 -8% 2,206 2,117 +4%
TOTAL 2,326 2,590 -10% 2,326 2,393 -3%
SAFETY
LTIFR5 (Employees) 0.06 0.11 -47% 0.09 0.09 -0%
Fatalities 0 0 NA 0 0 NA
Notes:
(1) Based on 80:1 Au/Ag conversion ratio and excluding base metals. Discrepancies in calculations are due to rounding. Mayskoye production reporting approach was amended to record production as soon as the ownership title for gold is transferred to a buyer at the mine site’s concentrate storage facility. Previous periods were restated accordingly.
(2) Excluding ounces at Mayskoye, which ownership title has already been transferred to a buyer, but not shipped.
(3) Calculated based on the unaudited consolidated management accounts.
(4) Non-IFRS measure based on unaudited consolidated management accounts. Comparative information is presented for 30 June 2023 (for
the three months period) and 31 December 2022 (for the nine months period).
(5) LTIFR = lost time injury frequency rate per 200,000 hours worked. Company employees only are taken into account.