Petropavlovsk Boosted By Impairment Reversal After 15% Revenue Decline

LONDON (Alliance News) - Petropavlovsk PLC on Wednesday reported a drop in annual revenue, though ...

Alliance News 24 April, 2019 | 9:36AM
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LONDON (Alliance News) - Petropavlovsk PLC on Wednesday reported a drop in annual revenue, though profit benefited from an impairment reversal.

Revenue for 2018 declined 15% to USD499.8 million, affected by the build-up of refractory gold concentrates, the miner said.

However, pretax profit increased to USD82.4 million from USD48.9 million, after reversing a USD101.7 million impairment.

The Russian firm reported 2018 production in January, with gold falling to 422,300 ounces from 439,600 ounces. Gold sales in 2018 fell to 369,600 ounces from 439,800 ounces.

At the time of the production results, Petropavlovsk said it plans to produce between 450,000 ounces and 500,000 ounces of gold in 2019, and this was reiterated Wednesday.

All-in sustaining costs in 2018 were USD1,117 per ounce of gold, higher than USD963 per ounce in 2017, due to higher total cash costs and increased capital expenditure.

Petropavlovsk also updated on its first quarter 2019 performance, with gold production slightly above management expectations at 107,700 ounces due to a strong performance at Malomir. The figure is, however, lower than the 112,600 ounces sold in the first quarter of 2018.

"Despite re-joining the company only during the second half of 2018 and after a weak first half performance, I am pleased the team was able to exceed the revised full-year guidance given at the time of the half-year trading update," said Chief Executive Pavel Maslovskiy.

"Beyond this, the principal highlight of the year was the completion of the pressure oxidation hub which has seen throughput and gold recoveries exceed expectations from even the earliest stage of its ramp-up."

"This progress has continued apace in the first quarter of the current financial year, with approximately one-quarter of our total production in the first quarter being attributed to the processing of our own refractory material," Maslovskiy continued.

"We remain on target to meet guidance of between 450,000 to 500,000 ounces sales for 2019 with an increasing contribution from processing refractory concentrates."

Shares were 3.7% lower on Wednesday morning at 8.04 pence each.

By George Collard; georgecollard@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Petropavlovsk PLC 8.29 -
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