Russia's Polyus reports jump in profit on rising gold sales

MOSCOW (Reuters) - Russia’s largest gold producer, Polyus, on Monday reported a 20 percent jump in fourth-quarter adjusted net profit to $291 million compared with last year, lifted by increased production and rising sales of the metal.

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Adjusted net profit for the full year rose to $1.33 billion, Polyus said, up from $1.02 billion in 2017.

Shares in Polyus were down 0.7 percent at 0828 GMT.

The company also said adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the fourth quarter stood at $484 million, up 4 percent on the year.

Revenue in the fourth quarter was at $774 million, up 4.2 percent on the year. The company’s sales in 2018 were up 8 percent compared with the previous year at 2,333 thousand ounces of gold.

The company said it planned to invest around $725 million in 2019, an increase on its earlier forecast of $650 million, reflecting delays to the construction of some projects at its Natalka gold deposit in Russia’s far east.

Polyus chief executive Pavel Grachev told Reuters in an interview in December that the company aimed to see a full ramp-up of production at its new Natalka gold deposit in December or in early 2019.

Capital expenditure in 2018 was at $736 million, the company said on Monday, down from $804 million in 2017.

“Polyus demonstrated solid free cash flow generation during the year despite a capex intensive period,” Grachev said in a statement.

“Polyus expects to deliver approximately 2.8 million ounces of gold in 2019, which is in line with our initial guidance. The Natalka operations ... and a number of ongoing throughput capacity expansion projects across our assets will underpin further production growth,” he said.

Polyus said its board of directors intended to recommend a second half 2018 dividend of $296 million, or $2.2 per share.

Reporting by Andrey Kuzmin; Writing by by Maria Vasilyeva; Editing by Louise Heavens