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Petropavlovsk profit jumps 31% in FY'17 on higher gold prices, sales volumes

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Petropavlovsk profit jumps 31% in FY'17 on higher gold prices, sales volumes

Petropavlovsk PLC's profit in 2017 jumped about 31% year over year to US$41.5 million, from a year-ago profit of US$31.7 million, it said March 28.

The results were positively impacted by an increase in operating profit and a US$34.6 million benefit on capitalized interest, partially offset by US$29.2 million of deferred taxation.

Revenue increased 9% year over year to US$587.4 million, mainly on the back of a 10% increase in sales volumes and a 3% increase in the average realized gold price.

Operating profit was up 45% at US$111.9 million due to the partial reversal of previously recognized impairment losses at the K&S iron ore mine in Russia recorded by company associate IRC Ltd.

All-in sustaining costs increased 19% to US$963/oz due to higher sustaining CapEx at the Pioneer and Malomir underground projects, expansion of the Pioneer and Albyn tailings dams, ongoing near-mine exploration, prospective stripping at the Albyn and Malomir mines, and an increase in central administration expenses.

CapEx increased to US$88.1 million, compared to US$29.4 million in 2016.

Petropavlovsk's gold production totaled 439,600 ounces, compared to 400,200 ounces in 2016.

This year, the company expects to produce between 420,000 and 460,000 ounces of gold at all in sustaining costs of between US$800/oz and US$850/oz. Total cash costs are expected between US$700/oz and US$750/oz.

CapEx is expected to further increase to US$105 million.

The Malomir flotation plant is expected to be commissioned in the second quarter, the company said.