Page 134 - RusRPTFeb21

reported a $2.781bn revenue. The Russian company had a terrible first half of the year in 2020 with sales coming in well below those of previous years, but business picked up in the last quarter​ and started to surge in December as demand recovered. ​Russia's diamond major ​Alrosa​ reported 43% year-on-year and 34% month-on-month growth in total sales in December 2020 to $522mn. As followed by ​bne IntelliNews​, the CEO of the company, Sergey Ivanov, pledged to deliver record-high sales in December, while anticipating a strong outlook for 1Q21. The company has surprised on the upside with ​strong sales in 2H20​, going b​ ack into the black in 3Q20 overall​, after previously struggling ontheweakmarketandcancellingdividendsfor1H20​.B​ oth​DeBeersand Russian ​Alrosa decided to increase prices in 2021 by 4-5% and 6-7% resp​ectively as demand improved due to post-holiday restocking and strong trading ahead of the Chinese New Year, BCS Global Markets wrote on January 19 citing Rappaport.
Polymetal​ reported a solid set of 4Q20 and 2020 trading results on 29 January. ​Polymetal recorded no fatalities among its workforce or contractors in 2020. Gold production (Au Eq) was up 4% y/y, reaching 1,559koz, slightly above the company’s own guidance of 1.5mnoz. During the year, gold production at Kyzyl grew 11% y/y, and the Polymetal assets Albazino (+8% y/y), Omolon (+7% y/y), Varvara (+16% y/y) and Mayskoye (+8% y/y) all posted growth as well. Dukat (-3% y/y), Svetloye (-11% y/y) and Voro (-16% y/y) posted negative production dynamics due to grade depletion (Dukat) and lower grade and recovery rates (Voro CIP). Revenue was up 28% y/y to $2.865bn thanks primarily to the higher gold price, and the company’s net debt at the end of 2020 was down 9% y/y to $1.583bn. Guidance for 2020 and 2021. Management expects the company’s TCC for 2020 to have been below its original guidance ($650-700/oz) due to favorable FX dynamics in Russia and Kazakhstan, while AISC should have stayed within the original guidance range ($850-900/oz) due to higher capex (accelerated pre-stripping and fleet renewals). Capex in 2020 is expected to have been 10% higher than originally guided ($590mn), as the company brought some capital investments forward and substantially increased the amount of capitalized stripping. The gold production target for 2021/22 remains unchanged at 1.5/1.6mnoz (Au Eq). Polymetal has increased its TCC guidance for 2021 to $700-750/oz on the back of expected FX headwinds, higher fuel pricing and wage inflation. Capex in 2021 is expected to be $560mn, up 15% vs. the previous guidance due to the higher cost of construction and COVID-19-related costs, pushing the 2021 AISC guidance range to $925-975/oz.
● Steel
Magnitogorsk Iron and Steel Works​ (MMK) has reported 4Q20 IFRS results that were 7% above consensus on EBITDA. ​While 4Q20 revenues ($1.85bn, up 18% q/q) were in line with our and consensus estimates, EBITDA came in at $474mn, up 35% q/q and 10% above our estimate on lower than
134 ​RUSSIA Country Report​ February 2021 www.intellinews.com