Polyus reports sharp decrease in Q1 profit
Russia’s largest gold miner, Polyus, on Wednesday reported a 51% drop in first-quarter profit, reflecting the impact of non-cash items.
Profit fell to $244-million in the March 2018 quarter, down from $499-million in the same period of 2017, and also lower than the $267-million reported in the fourth quarter of last year.
The company said that non-cash items, such as gain on investments and the revaluation of derivative financial instruments, as well as foreign exchange gains, had impacted on its profit.
Revenue remained unchanged on a year-on-year basis at $617-million, but decreased by 17% on a quarter-on-quarter comparison. The decrease on the December quarter was driven by lower sales volumes as gold output volumes declined 13% on the back of inventory accumulation at the refinery and on site.
Lower sales volumes, as well as an increase in fuel prices and power tariffs, put pressure on costs, with group total cash costs increasing by 18% quarter-on-quarter, or 1% year-on-year, to $383/oz.
Polyus reported adjusted net profit of $233-million, up 10% year-on-year, or an 8% quarter-on-quarter decrease.
During the March quarter, the miner spent $182-million on capital expenditure, which is more than what was spent a year earlier, but 35% below the December quarter spend.
CEO Pavel Grachev said in a statement that the ramp-up of the new Natalka mine was ahead of initial expectations and that it was operating above 80% of its design processing capacity.
Polyus has a production guidance of 2.375-million to 2.425-million ounces for 2018. First-quarter production amounted to 507 000 oz.
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