Page 111 - RusRPTSept20

they are likely to be materially below last year’s levels until 3Q20-end at least.
The net profit of Russian gold producer Polymetal International more than doubled on the year to US $381mn in January–June from $153mn in the same period of 2019, as calculated under International Financial Reporting Standards (IFRS), the company said in a statement on August 25. Basic earnings per share were $0.81, reflecting the increase in operating profit. Underlying net earnings increased by 98% to $373mn,” the company said. Revenue increased by 21% on the year to $1.135bn in the period due to high prices for gold and silver, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) went up 53% to $616mn.
Petropavlovsk’s Board of Directors has appointed Maksim Meshcheriakov Interim Chief Executive Officer as of 17 August. Pavel Maslovskiy, who was appointed company COO during the interim BoD, is leaving the company. The BoD plans to determine the permanent management team, including the CEO, in a due course. The BoD has also committed itself to strengthening corporate governance and adhering to the UK Corporate Governance code. In particular, it is seeking additional independent non-executive directors. No timing was mentioned for these processes.
Russian businessman Roman Abramovich and his partners are selling a 40.06% stake in Russian mid-sized gold producer Highland Gold to a Russian businessman, who will make a cash offer to remaining shareholders, they said on July 31, Reuters reported. Abramovich, Chelsea soccer club owner, is selling Highland Gold, in, which he was a shareholder for many years, at a time when gold price XAU= is close its record high as the COVID- 19 pandemic drives investors towards the metal as a safe haven. Fortiana Holdings Limited, a Cyprus-registered company of Vladislav Sviblov with interests in zinc and gold projects in Siberia, agreed to buy 145,759,871 shares in Highland Gold from Abramovich and his partners at 3.00 pounds ($3.94) per share. Highland Gold is one of the top 10 gold producers in Russia with several mines in Russia’s Far East. The offer will value the entire company at $1.4bn, with a 4% premium to the market close on Thursday. “This is a strategic investment for us, in line with our aim to build a broader asset portfolio in the natural resources sector in Russia,” Sviblov said in the statement. The price of the offer to remaining shareholders is expected to be not less than in this deal. The offer is expected to complete in the fourth quarter of 2020.
● Steel
Russian steel maker Evraz has reported a modest 2Q20 trading update, affected by the worse product mix and lower coal volumes. Accordingly, we expect weak earnings for 1H20 (to be reported on 6 August), with net debt/EBITDA rising to 1.8x. We think the company might still proceed with a 1H20 dividend announcement, which could offer a 4.1% semi-annual yield. During the conference call, we intend to focus on comments about the outlook for the domestic steel and coal markets, which are crucial for an earnings recovery in 2H20. While steel production and sales volumes matched our estimates, the company’s steel sales mix in 2Q20 was worse than we had anticipated, due to the higher share of semi-finished products. The company decided to change the mix due to the low demand for finished products in Russia and North America. As a result, the average realised price was 7% below our expectations. This was offset by a larger fall in the slab cash cost than we had expected, to $198/t. The company reported lower coal and
111 RUSSIA Country Report September 2020 www.intellinews.com