Polyus says output could be affected by coronavirus outbreak

Olimpiada mine, Russia. Image from Polyus.

Russia’s top gold producer Polyus said on Monday its output targets for the year could be affected by the new coronavirus, as it reported a 21% rise in adjusted core earnings in the first quarter.

Polyus, which said adjusted core earnings had reached $589 million in the period, said its operations had not been interrupted by the pandemic thus far.

Polyus reported a first-quarter net loss of $389 million on Monday, down from a profit of $697 million in the preceding three months

However, it warned of some risks to its Krasnoyarsk unit that could affect its operational targets for the year.

The unit is Polyus’ largest and operates major mines including Olimpiada, which saw an outbreak of coronavirus cases in May.

“The company is seeing modest downside risk to production guidance for 2020, and expects to provide the market with an update at the time of the trading update for the second quarter of 2020,” it said.

Polyus is putting “significant effort” into ensuring continuity of operations and to keeping projects on schedule, it said in a statement.

Chief Executive Pavel Grachev said the company was focused on ensuring the health and safety of staff, and described first-quarter results as “solid”.

Polyus – which is controlled by Said Kerimov, son of Russian tycoon Suleiman Kerimov – reported a first-quarter net loss of $389 million on Monday, down from a profit of $697 million in the preceding three months.

That swing was caused mainly by the falling value of the rouble, which affected its dollar-denominated debt repayments.

Polyus reported a foreign exchange loss of $339 million in the first quarter, compared to a $73 million gain in the previous three months.

With revenues also in foreign currency, however, the effect of foreign exchange rate fluctuations is contained. It posted an adjusted net profit of $486 million, up 100% compared to the same quarter the previous year.

(By Anastasia Lyrchikova, Polina Ivanova and Andrei Kuzmin; Editing by Jan Harvey)

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