Russia’s largest gold producer Polyus said today company’s revenue increased 6% y-o-y to $1,082 million, sizable cost reduction, with TCC down 14% y-o-y to $377/oz and AISC down 9% to $555/oz, adjusted EBITDA increased 17% y-o-y to $691 million, with adjusted EBITDA margin expanding 6 ppts y-o-y to 64%. Net debt increased significantly from $381 million to $3,469 million as a result of the share buyback in 1H 2016. Company’s adjusted net profit fell from 433 to $405 million year-on-year.
On 11 March 2016, Polyus announced the decision to buyback ordinary shares of PJSC Polyus and its ADRs. This had a major impact on financing cash flow in the reporting period. In order to finance the buyback, the Group entered into a $2.5 billion 7-year credit facility with PJSC Sberbank. However, buyback cash outflow was $3.4 billion and hence the financing cash outflow amounted to $967 million, as compared to $110 million outflow in 1H 2015.
As of 30 June 2016 the Group’s gross debt amounted to $4,851 million, more than two times higher comparing to $2,189 million at the end of 2015. the Group’s debt portfolio remains dominated by US dollar denominated instruments. Their share increased further to 85% as of the end of 1H 2016 (13% growth as compared to the structure as of the end of 2015) as the Company entered into a 7-year credit facility with Sberbank in January 2016. As previously mentioned in the cross-currency swaps section, the RUB 36 billion credit facility from Sberbank obtained in April 2014 and the RUB 15 billion bonds placed in July 2015 were both economically hedged via cross-currency swaps, noted in the release.
The majority of the maturities due after or during the 2021 comprises of the 7-year $2.5 billion credit facility from Sberbank and the six-year RUB bonds. The RUB 36 billion credit facility from Sberbank is due in 2019 and the Eurobond issue is due in 2020. Existing cash balances combined with $678 million of unused committed credit lines cover a substantial portion of debt repayments up to 2020 ($2.2 billion).