Polymetal earnings surge as gold sales increase

Polymetal International’s first-half earnings rose strongly as the precious metals miner benefited from rising prices and sales of gold.

Net earnings for the six months to the end of June rose 46% to $175m (£136m) as revenue increased 16% to $789m. Gold sales rose 17% to 445 Koz as prices rose 6%. Sales of silver fell 2% as prices fell 4%.

The FTSE 250 company declared an interim dividend of 17 cents a share, up from 14 cents a year earlier. The 2018 half-year payout is half the group’s underlying net earnings for the period.

Polymetal announced on 20 August it had shipped the first concentrate from its Kyzl goldmine in Kazakhstan to China as it seeks to ramp up production at the site.

Vitaly Nesis, Polymetal’s chief executive, said: "I am delighted to report strong earnings on the back of solid operational delivery in the first half of the year. We expect stronger production and free cash flow generation for the second half and remain focused on steadily progressing our further growth pipeline, including full ramp-up of Kyzyl, while generating meaningful dividends to our shareholders".

Net debt increased to $1.65bn from $1.42bn at the end of December, driven by a seasonal working capital increase. Polymetal said stronger production and a working capital drawdown should drive stronger free cash flow generation in the second half.

Polymetal shares, down 30% since the start of 2018, were little changed at 648p at 08:40 BST.