OREANDA-NEWS.  September 06, 2013. Polymetal International plc (LSE, MICEX: POLY; ADR: AUCOY) (together with its subsidiaries, including JSC “Polymetal” – “Polymetal”, the “Company”, or the “Group”) is pleased to announce the Group’s financial results for the six months ended 30 June 2013.

FINANCIAL HIGHLIGHTS
Revenue in 1H 2013 decreased by 6% to USD 721 million compared to 1H 2012 (“year-on-year”) with average realised gold and silver prices decreasing 13% and 18% respectively year-on-year. Price decline was partially offset by 8% growth in the volume of gold equivalent sold.

Group Total Cash Cost1 was USD 787/ per gold equivalent ounce (“GE oz”), up 13% compared to 2H 2012 (“half-on-half”) and 17% year-on-year. Costs were negatively affected by the ramp-up at the Amursk POX facility and the decision to suspend mining at Birkachan. All-in cash costs1 comprised US\\$ 1,210/GE oz and increased 9% year-on-year, driven mostly by an increase in total cash costs during the period which was meaningfully offset by production growth and the resulting decline of SG&A and capex per gold equivalent ounce sold. Both cost measures are expected to decline in 2H as operating cash costs decline at both Albazino and Omolon.

Adjusted EBITDA was USD 239 million, a decrease of 38%, driven mainly by a decline in commodity prices and Adjusted EBITDA margin was 33% compared to 51% in H1 2012;

A non-cash pre-tax impairment charge resulting from the decline in gold and silver prices of US\\$ 305 million was recorded as at 30 June 2013, mainly due to the write-off of goodwill and mining assets at Varvara, Khakanja and low-grade ore stockpiles at Omolon. The post-tax amount recorded was USD 273 million. The impairment calculations were performed using conservative price assumptions of USD 1,200/oz for gold and USD 18/oz for silver, which are meaningfully below current spot prices.

As a result of non-cash foreign exchange losses and impairment charges, the Group recorded a net loss of US\\$ 255 million in 1H 2013, compared to a USD 157 million net profit in 1H 2012. Underlying net earnings (adjusted for the after-tax amount of impairment charges) were USD 17 million.

Special and regular dividends for 2012 in the amount of USD 0.50 and USD 0.31 per share (total of USD 313 million) were paid in January and in June 2013, respectively, in accordance with Polymetal’s dividend policy. Based on Net Debt / Adjusted EBITDA as at 30 June 20132  of 1.6 (31 December 2012: 1.1), an interim dividend of USD 0.01 per share representing 30% of the Group’s underlying net earnings for 1H 2013 is declared by the Board.

The Group’s liquidity profile remained comfortable. Net debt increased over the period to \\$1.3 billion as working capital requirements increased by USD 94 million mostly due to increases in inventories at Albazino, Dukat, Mayskoye, and Omolon combined with reduced operating cash flows to due lower metals prices. The build-up in working capital is expected to reverse in 2H releasing substantial cash flows and leading to a decline in net debt.

The Company maintains its full-year Total Cash Cost guidance of US\\$ 700-750 per ounce of gold equivalent ounce and annual production guidance of 1.2 Moz of gold equivalent.