FTSE 100 contender Polymetal International (POLY) strengthened its claim for a return to the UK’s benchmark index after strong results driven by a surging gold price.
The firm has been tipped as a strong contender to replace Marks & Spencer (MKS) in the basket of leading UK-listed stocks.
Revenue was up 20% to $946m in the six months to 30 June as the FTSE 250 gold and silver miner recorded 22% growth in gold production.
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Polymetal owns gold and silver mines in Russia, Kazakhstan and Armenia. First half adjusted EBITDA rose 34% to $403m, with its all-in sustaining costs of producing gold holding steady at $904 per ounce, a 1% rise on last year.
Underlying net earnings increased 21% to $188m, allowing the Russian miner to increase its interim dividend to 20 cents per share.
WELL-PLACED FOR RISING GOLD PRICE
Polymetal has benefitted from the rising price of gold, which currently stands at around $1,530 and has been consistently rising upwards from $1,300 at the start of the year.
Its shares have ticked up around 2.4% this morning to hit a 12-month high of £11.43, continuing their upward trend in the past year.
Gold is expected to rise even further before the year is out and Polymetal remains well-placed to capitalise, with the firm still on track to meet its full year production and cost guidance.
‘LOWER COSTS, HIGHER PRODUCTION’ IN SECOND HALF
Polymetal CEO Vitaly Nesis said, ‘Traditionally, we expect seasonally lower costs, higher production and materially stronger cash flow generation in the second half of the year, allowing us to meet our full year cost and production guidance.’
The firm is aiming to produce 1.55m ounces of gold this year, at an all-in cost of around $800-850 per ounce.
But it pointed out that the cost guidance remains contingent on the Russian ruble and Kazakhstani tenge holding up against the US dollar, as those exchange rates have a significant effect on the firm’s local currency denominated operating costs.
