Petropavlovsk Plc (POG), a producer of gold in Russia, said first-half profit fell 90 percent as interest payments and depreciation costs rose.
Net income slumped to $11 million from $108.2 million a year earlier, London-based Petropavlovsk said in a statement. Interest charges more than doubled to $34.6 million in the period and the company took a depreciation charge of $106.9 million.
Petropavlovsk has accumulated $1.12 billion in debt as it expands its Albyn and Pioneer mines and builds a so-called pressure oxidation plant at its Pokrovskiy mine. The company said interest costs will be “slightly higher” in the second half as debt continues to rise.
Petropavlovsk, which produced 279,100 ounce of gold in the first half compared with 219,100 ounces a year earlier, reiterated its full-year target of 700,000 ounces. Sales rose 15 percent to $546.8 million.
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