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Polyus posts Q2 earnings growth of 33% YOY amid sales increase

Increased sales and production boosted PJSC Polyus' adjusted net profit in the second quarter by 33% year over year, bringing it to US$272 million, the company said in its financial results on Aug. 14.

In the first half, Polyus sold 983,000 ounces of gold, up 17% compared to the year ago period on the back of higher gold output.

The adjusted results from the second quarter included US$121 million in foreign exchange gains. Excluding adjustments, net profits fell 49% to US$104 million from the year-ago US$205 million.

Revenues for the quarter came in at US$625 million, up 5% from US$571 in the year ago period.

Adjusted EBITDA increased 5% to US$379 million from US$361 million and the Russian gold producer brought net debt down 11% to US$3.08 billion. The decrease in debt was partly due to a sale of the stake in the Nezhdaninskoye deposit in Siberia, the company said.

Capital expenditure rocketed 111% to US$190 million from US$90 million due to ongoing works at the company's main development project, Natalka. Polyus said it is on track to commission the project at the end of the year, followed by a ramp-up period to achieve the project's design parameters.

CapEx for the Olimpiada project increased 65% to US$38 million as the company pushed ahead with plans to connect the mine to the Razdolinskaya-Taiga grid, with the procurement of a mining fleet and the construction of a bio oxidation circuit. The expansion of the mill at Verninskoye was reflected in a CapEx increase of 75% to US$7 million.

Polyus CEO Pavel Grachev said the implementation of costs efficiency measures in the first half allowed the company to keep total cash costs low.

"This included the implementation of a number of efficiency initiatives at our business units which helped ensure [total cash costs] remained below US$400/oz despite the 17% local currency strengthening," he said.

The company recommended a first half dividend of 104.3 Russian rubles per share.

As of Aug. 11, US$1 was equivalent to 59.96 Russian rubles.