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Polyus raises FY'18 gold output guidance, Q4'17 profit drops

Russian gold miner PJSC Polyus' profit for the fourth quarter of 2017 declined 28% over the third quarter to US$267 million, or US$2.05 per share.

Reporting a 5% quarterly decline in operating profit to US$391 million, the company said results were impacted by a lower gain on derivatives and lower foreign exchange gains.

Revenue in the period remained stable quarter over quarter at US$743 million, according to a Feb. 15 release.

The company's gold sales increased 3% to 597,000 ounces, while the average gold price realized declined to US$1,275 per ounce, from US$1,279 per ounce.

Production in the quarter dropped 10% over the previous three months to 580,000 ounces, while all-in sustaining cash costs rose 11% to US$662 per ounce sold.

CapEx increased 25% over the third quarter to US$279 million.

Polyus said it plans to invest about US$850 million across the business, including US$250 million of maintenance CapEx and about US$150 million of capitalized operating expenses related to the Natalka operations.

Capital expenditures in 2017 increased to US$804 million, from US$466 million a year ago, due to higher maintenance CapEx, ongoing construction works at the Natalka mine in Russia and brownfield development projects.

The company's profit for the full year dropped 14% year over year to US$1.24 billion, or US$9.61 per share, as the company recorded a foreign exchange gain in the previous year as well as finance costs.

Polyus increased its production guidance for 2018 to 2.375 million to 2.425 million ounces, from 2.35 million to 2.40 million ounces. Gold output in 2019 is expected to increase to 2.8 million ounces. Gold production in 2017 rose 10% year over year to 2.16 million ounces.