27th Sep 2018 10:07
LONDON (Alliance News) - Petropavlovsk PLC said Thursday it sank to a half year loss as gold output fell and production costs rose, yet it expects gold output to be higher than initially forecast for the full year.
For the six months ended June, the Russian gold miner swung to a USD16.2 million pretax loss from a USD46.8 million profit the year prior after revenue fell to USD270.5 million from USD304.0 million the year before.
Results were hurt by a drop in gold production during the period.
Gold production fell to 201,400 ounces from 232,400 ounces the year prior. This was primarily due to the closure of its Pokrovskiy mine - which saw production drop to 5,600 ounces from 14,200 ounces the year prior - and issues in getting Albyn into full production capacity.
Despite this, the firm raised its production guidance for the full year to between 420,000 and 450,000 ounces of gold. This is up from the initial 400,000 ounces to 410,000 ounce estimate announced in late July. In 2017, Petropavlovsk produced 439,600 ounces of gold.
The average realised price per gold ounce, however, rose to USD1,285 from USD1,255 the year prior. Nonetheless, all-in sustaining costs per ounce also rose to USD1,138 from USD965.
"After the period of instability in the first half of 2018, I am delighted to be leading Petropavlovsk's operations once again during this crucial phase and in doing so to be supported by the company's original development team," Chief Executive Pavel Maslovskiy said.
In June, shareholders voted in favour of ejecting the entire current board and to replace them with previous incumbents. As part of this shake up, former directors Maslovskiy, Chairman Roderic Lyne, and Non-Executive Director Robert Jenkins.
"Whilst the results today show the effect of the disruptions to the operations caused by the management hiatus in the first half, we believe we have already turned a corner," Maslovskiy added.
"Hence I am confidently presenting today the improvement on our original guidance for the full year bringing the business back into sustainable operations and increasing profitability."
Shares in Petropavlovsk were 5.7% higher at 6.85 pence on Thursday.
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