Polymetal – Providing shareholder satisfaction #POLY

Polymetal – Providing shareholder satisfaction #POLY

The FTSE 250-listed mining company Polymetal PLC (latest share price 874p, market cap £4.1bn) has announced preliminary results for 2018.

Its activities are based in Russia, Kazkhstan and Armenia and involve gold, silver and copper mining and related activities.

I bought Polymetal shares in January based on its dividend yield, the gold outlook for this year and the quality metrics passing my selection rules. Here are the highlights from the recent release.

Preliminary Results 31 December 2018

Sales increased by 4% to $1,882m. Looking back on my notes, based on a trailing twelve month basis I was expecting $1,921m so the final half of the year was slightly disappointing.

It looks as though this was caused by average silver prices being down by 8% and gold by 4% versus last year. The overall rise in sales came from increased output.

The company did reduce expenditure to offset this. Cash costs were reduced by 1% and all-in sustaining cash costs by 4%.

Overall this means Polymetal reported an almost unchanged net profit of $355m versus $354m last year.

My view now

The board also announced this morning an increase to the final dividend of 5%. It’s covered by free cash flow and has increased for the third year in a row.

Although a little disappointed with the final reported revenue, I like the fact that the dividend has risen again and the operating margin, returns on assets, ROCE and ROE all remain attractive to me.

I intend to hold with a close eye on the price of gold and the next trading update.


At the time of publication, the author holds a long position in POLY.

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