Russian metals producer Polymetal International said revenue was up 43% to $1.326bn in the year to end-December, driven by 13% increase in gold equivalent ounces sold and a 26% increase in the average realised gold price.
Adjusted EBITDA was $624m, up 47% and exceeding revenue growth; adjusted EBITDA margin was up 110 bps to 47% despite ramp-up of new mines and operational challenges in the beginning of the year.
Total cash cost was $701/AuEq oz, up 26% compared to 2010 as a result of Russia's domestic inflation of 6.1%, Rouble strengthening against the US dollar by 3.4%, and relatively high cost levels at Omolon and Albazino mines which have just commenced commercial production and are still in ramp up mode.
Total cash cost of mature operations (ex. Omolon and Albazino) was $642/ AuEq oz, up 19% compared to 2010.
Diluted EPS was up 12% to $0.74 per share as net earnings increased by 21% to $290m.
Adjusted diluted EPS rose 30% to $0.89 per share as adjusted net earnings (excluding share based compensation) increased by 41% to $347m.
An inaugural dividend of $0.20 per share is proposed in accordance with the new dividend policy.
Strong liquidity and funding profile: Net debt / adjusted EBITDA reduced to 1.41, with 65% of borrowings being long-term.
The Company said it is on track to deliver 1 Moz gold equivalent production in 2012, with all related investments completed or nearing completion by the end of 2011.
Vitaly Nesis, CEO, said: "2011 was a very successful year for the Company. We believe that a combination of robust operating performance, with a good momentum achieved in the second half of the year, favorable market conditions and meaningful progress across all key investment projects, has delivered strong financial results in 2011 and superior positioning for value creation in the coming years.
"Polymetal's inaugural dividend payment demonstrates our commitment to delivering this value to our shareholders. We expect a strong financial year in 2012 on the back of meaningful production growth to 1 Moz, and robust cashflow generation as investments made in prior years are starting to pay off."
The Company said it is positively looking into 2012. It will be a year when we will be benefiting from the following factors:
· Achievable production targets of 1 Moz of gold equivalent, representing a 24% increase over the 2011 level;
· Completion of a major capital investment cycle in 2011, with significantly less capital expenditure planned for 2012;
· Completion of the ramp-up of new operations at Omolon and Albazino allowing the Group to achieve robust cost performance.
The Company therefore expects a strong financial year, both in terms of earnings and free cash flow. The Company will continue to implement a rigid liquidity policy, further pushing the debt level down in order to maintain net debt/adjusted EBITDA below 2011 levels and to be able to generate the anticipated dividend flow to our shareholders.
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