Polyus posts highest ever profit margin

Polyus, Russia’s largest gold producer, posted its highest ever production figures, profit margins and free cash flow generation in 2016, as revenues rose an annual 12 per cent to $2.46bn on increased production and higher gold prices.

Polyus, which is listed in Moscow and is mulling a return to London for a secondary listing, surpassed its own production guidance last year with output of 1.97m ounces of gold, and forecast 2017 output of 2.075-2.125m ounces.

The world’s fourth-largest gold miner by reserves and ninth-largest by output said on Tuesday that its adjusted EBITDA for 2016 was $1.536bn, on a record margin of 62 per cent.

At the same time, net debt at the end of the year stood at $3.24bn, up from $364m a year previously. The company raised $1.3bn through two Eurobond issues for refinancing activities.

“2017 is to become another year of growth,” said chief executive Pavel Grachev. “A number of brownfield projects as well as [major new mine] Natalka are to be commissioned, which will deliver a further production increase.”

The company said its total cash cost across its six mines in Russia fell 8 per cent year-on-year to $389 per ounce in 2016.