3rd Mar 2021 09:15
(Alliance News) - Polymetal International PLC on Wednesday hiked its dividend after a steep increase in annual profit thanks to increased gold and silver prices.
Polymetal shares were up 2.2% at 1,471.50 pence in early morning trading on Wednesday, making it one of the best performers in the FTSE 100.
The Cyprus-headquartered gold and silver producer posted a USD1.41 billion pretax profit for 2020, more than twice its USD634 million profit the year before.
This came as revenue climbed 28% to USD2.87 billion from USD2.24 billion as average realised gold and silver prices both rose 27% year-on-year to USD1,797 per ounce and USD20.9 per ounce respectively.
Gold sales rose 2% to 1.39 million ounces while silver sales dropped 14% to 19.3 million ounces, which Polymetal said was "broadly in line with production dynamics". Gold equivalent sold was broadly flat at 1.62 million ounces from 1.63 million.
The company reiterated its current production guidance for 1.5 million ounces of gold equivalent for 2021 and 1.6 million ounces for 2022, with production weighted towards the second half due to seasonality.
Total cash costs are forecast in the USD700 to USD750 per gold equivalent ounce range for 2021, having fallen 3% in 2020 to USD628 per gold equivalent ounce - below the lower end of 2020 guidance for USD650 to USD700 per gold equivalent ounce.
2021 all in sustaining cost is expected at USD925 to USD975 per gold equivalent ounce, having remained flat in 2020 at USD874 per gold equivalent ounce. This USD874 figure was in line with USD850 to USD900 per gold equivalent ounce guidance.
"The expected increase over 2020 cost levels is driven by the assumed appreciation of the Russian rouble and Kazakhstan tenge and increased domestic diesel fuel prices compared to 2020, as well as above-CPI inflation in the mining industry and full-year impact of Covid-related measures," Polymetal explained.
The company hiked its total dividend per share for 2020 by 57% to USD1.29 from USD0.82 the year before, just missing the analyst consensus which saw a dividend of USD1.30 per share.
Chair Ian Cockerill said: "2021 is likely to be a highly volatile year as the financial fallout from the pandemic becomes more obvious. So, I'm pleased to report that our company is in good shape and will be able to take advantage of the current positive stage in the precious metals cycle."
By Anna Farley; [email protected]
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