Polymetal shares were trading up 8.5% to 280.9p on Wednesday morning following the update on their annual results.
Polymetal shares had dropped 72% in a week due to the ongoing Russia-Ukraine conflict.
Vitaly Nesis, Group Chief Executive Officer, Polymetal commented, “We are shocked and appalled by the events going on in Ukraine. The conflict in Ukraine and related economic and political developments are likely to require a lot of management efforts to maintain company performance. However, despite a wide range of uncertainties we will be working under in 2022, it is our current intention to operate as normally as possible.”
Revenue grew by 1% in 2021, to $2.89bn, up from $2.86bn in 2020.
The average realised gold and silver prices followed trade patterns, with gold being unchanged YoY and silver rising 19%. Production of gold equivalent was 1,677 Koz, up 2% from the previous year. Due to the strong December output at Dukat, gold sales were unchanged YoY at 1,386 Koz, while silver sales were down 9% to 17.5 Moz and behind production by 2.9 Moz. The shortfall is expected to end in 1H 2022.
Adjusted EBITDA was down 12% to $1.4bn, from 2020, owing primarily to raising costs due to relatively steady sales volumes and earnings.
The drop in operational profit was a consequence of the increased costs resulting in net profits of $904m in 2021. The basic EPS of $1.91 per share in 2021 also dropped from $2.25 per share in 2020.
Capital expenditure reflects maximum capital spending, which includes construction projects at POX-2 and Nezhda, momentum of the Kutyn and Veduga projects, the beginning of the feasibility report for the Pacific POX, and higher stripping at Nezhda, Veduga, and Kyzyl, as well as continuing macroeconomic demands and substantial substances and wage increases.
Net debt rose to $1.6bn in 2021 from $1.3bn in 2020. Dividend payments of $635m in 2021 combined with additional capital expenditures accounted for the majority of the increase in net debt.
Final dividends were announced to be $0.52 per share in 2021.
“We are reporting strong net earnings for the year amidst a variety of macroeconomic and pandemic-related challenges. Excellent financial results were supported by robust operating performance, successful launch and ramp-up of Nezhda, as well as advancement of our POX-2 project and Veduga investment decision. Crucially – for the second year in a row – we had no fatalities among Group employees. Polymetal also continues to generate significant free cash flows and pay substantial dividends,” said Vitaly Nesis.