Stronger gold drives Polymetal profit to record high

Voro mine is one of Polymetal’s first key gold assets, acquired in 1998. (Credit: Polymetal)

Polymetal (LON: POLY) said on Wednesday its 2019 net earnings rose 36% to a record high of $483 million due to stronger global gold prices and higher output.

The spread of the coronavirus this year has driven a further jump in gold prices with spot gold in London registering its biggest one-day percentage gain since 2016 on Tuesday when the U.S. Federal Reserve cut its interest rate to cushion the economic impact from the virus.

Buoyed by higher gold prices, shares in Polymetal, part-owned by businessman Alexander Nesis, are up 6% so far this year in London.

“We are pleased to report record earnings and solid free cash flow for the year underpinned by a robust operating performance and strong commodity prices,” Vitaly Nesis, Polymetal chief executive, said in a statement.

A final dividend of $0.42 a share, or $197 million in total, has been recommended by its board of directors, Polymetal said. Along with a special dividend announced in January, this will bring its total 2019 dividend to $385 million compared to $223 million in 2018.

Polymetal’s production of gold equivalent, a mix of gold and other metals, rose by 3% to 1.61 million ounces in 2019 and exceeded Polymetal’s initial guidance of 1.55 million ounces. The average price of its gold and silver rose by 13% and 11%, respectively.

The company reiterated its production guidance of 1.6 million ounces for each of 2020 and 2021.

(By Anastasia Lyrchikova and Polina Devitt; Editing by Maria Kiselyova and Carmel Crimmins)

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