29th Apr 2014 08:35
LONDON (Alliance News) - Petropavlovsk PLC Tuesday said it swung to a pretax loss in 2013 and would not recommend a final dividend for 2013 after higher operating expenses offset increases in production.
The gold mining company with operations in Russia said it swung to a pretax loss of USD522.7 million in 2013 from a pretax profit of USD40.3 million in 2012, as revenues fell 3.2% to USD1.20 billion from USD1.24 billion.
Its net loss widened to USD713 million from USD244 million, which it said was largely attributable to an aggregate of USD679 million of post-tax impairment charges and write-downs.
The company said its revenues fell as an increase in production and sales volumes was offset by a 9% decrease in its average realised gold price from USD1,670 per ounce in 2012 to USD1,519 per ounce in 2013.
Petropavlovsk noted that its operating expenses increased significantly to USD1.67 billion from 1.11 billion but said it had managed to reduce its net debt during the period by USD115 million to USD948 million.
It warned that there are continuing financing problems at the company and said that a plan to execute its refinancing is well advanced, ahead of its debt and convertible bond deadlines, and it will announce this programme shortly.
The company said it is not recommending a final dividend for 2013 in order to strengthen the group's financial position.
Petropavlovsk reiterated that in 2014 it forecasts a 5% reduction in total cash costs for hard-rock production to USD950 per ounce, a 68% reduction in development and maintenance expenditure to USD60 million, and a 27% reduction in exploration expenditure to USD34 million.
The company announced in January that its full-year 2013 gold production increased 4.2% to 741,200 ounces from 710,400 ounces the previous year, meeting the company's revised guidance.
Petropavlovsk originally had a 2013 production guidance of 760,000 to 780,000 ounces but in October reduced this rate to 740,000 to 750,000 ounces due to the affects of bad weather.
The company set a 2014 production level of 625,000 ounces of gold, a significant decrease on the 2013 figures due to the disposal of certain high-cost alluvial assets in 2013 beginning to hit production. It produced 159,100 ounces of gold in the first quarter of 2014, up 16% from 136,800 ounces in the 2013 quarter.
Petropavlovsk shares were down 8.4% to 76.50 pence in early trading Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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