Polyus reports strong financial results for Q3 2020; Profit jumped by 72% year-over-year

PJSC Polyus (LSE, MOEX — PLZL) (“Polyus”, the “Company”, and together with the Company subsidiaries, the “group”) has today released its consolidated financial results for the third quarter of 2020.

Key highlights

  1. Total gold sales volumes amounted to 772 thousand ounces, up 15%
    compared to the second quarter of 2020. This reflects seasonally higher
    production volumes at Alluvials as well as increased refined gold production volumes across almost all hard-rock deposits. This also includes 70 thousand ounces of gold contained in concentrate from Olimpiada, compared to 26 thousand ounces in the second quarter of 2020.
  2. Revenue for the third quarter 2020 totalled $1,454 million, up 26% compared to the previous quarter. This is partially attributable to the aforementioned growth in gold sales volumes. At the same time, the average realised refined gold price was 11% higher compared to the second quarter, at $1,907 per ounce.
  3. The group’s TCC for the third quarter increased 9% to $369 per ounce
    compared to the previous quarter due to the seasonal increase in output at the structurally higher cost alluvial operations. In addition, higher MET expenses, driven by the increase in average realised gold price put additional pressure on the group’s TCC. These factors were partially offset by an increase in share of lower-cost antimony-rich flotation concentrate in total gold sold. The latter also resulted in higher by-product credit of $14 per ounce in the third quarter compared to $1 per ounce in the previous quarter.
  4. Polyus adjusts its TCC guidance for 2020 downwards, based on the
    Company’s operational performance for the nine months of 2020, with total cash costs now expected to stay within the range of $375-$425 per ounce for the full year 2020, compared to the previous estimate of $400-$450 per ounce.
    Polyus continues to apply the foreign exchange rate assumption of 60 rouble per dollar for TCC guidance calculation.
  5. Adjusted EBITDA for the third quarter of 2020 reached $1,103 million, a 28% increase compared to $860 million in the previous quarter, the highest on record and driven by growth in gold sales volumes and higher gold prices during the period.
  6. Capital expenditures (“capex”) for the period remained largely flat, at $130 million, compared to $127 million in the previous quarter.
  1. Levered free cash flow for the third quarter of 2020 reached $720 million, primarily due to growth in the operating profit for the period.
  2. The net debt /adjusted EBITDA ratio decreased to 0.7x compared to 0.8x as at the end of the previous quarter, reflecting a lower net debt position and adjusted EBITDA growth over the last twelve months.
  3. Polyus has today provided an overview of the key highlights of the PreFeasibility study for Sukhoi Log, confirming the outstanding economic viability of the project, in addition to selecting key areas of the project for further in-depth analysis.

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