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UPDATE 1-Polyus Gold profit boosted by strong sales, prices
April 2, 2012 / 8:21 AM / 6 years ago

UPDATE 1-Polyus Gold profit boosted by strong sales, prices

* Polyus’s 2011 net profit up to $558 mln in 2011

* Company’s gold sales jump to record high of $2.3 bln

* Polyus CEO joins company’s board, president steps down

By Polina Devitt

MOSCOW, April 2 (Reuters) - Russia’s largest gold producer Polyus Gold, which may begin an up-to-$1-billion share sale later this month, posted a 57 percent increase in annual net profit, boosted by strong sales and high gold prices.

Polyus, partly owned by oligarch Mikhail Prokhorov who lost presidential elections to Prime Minister Vladimir Putin last month, said on Monday its bottom line reached $558 million in 2011, with gold sales jumping 37 percent to a record high of $2.3 billion.

The company said earnings before interest, tax, depreciation and amortisation (EBITDA) reached $1.1 billion in 2011, up 55 percent year-on-year, while its total cash costs rose by 19 percent to $661 per troy ounce.

Gold prices, viewed as a safe haven in an uncertain economic environment, moved towards $1,700 an ounce last week after the U.S. Federal Reserve hinted at new pro-growth measures, edging closer to record-highs of over $1,900 seen in September.

In a separate statement, Polyus said that its chief executive German Pikhoya was appointed to the board of directors, replacing Evgeny Ivanov who also stepped down as a president of the company. The company did not give the reason for the changes.

Polyus is likely to go ahead with a share sale worth between $700 million and $1 billion in late April, paving the way for a premium listing on the London Stock Exchange, sources familiar with the matter said last week.

Polyus, which sits on potentially lucrative gold reserves in Russia’s far east and is currently worth around $10 billion, is seen by Prokhorov as an attractive target to be merged with an international player.

In 2012, the company aims to increase gold production, including production at its Kazakh assets by 6 percent to 1.6 million ounces.

The company’s global depositary receipts (GDR) closed at $3 in London on Friday, while its low-liquid shares in Moscow were up 0.06 percent at 0658 GMT.

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