Polymetal International Plc (POLY), a Russian gold miner on London’s FTSE 100 index, raised its output target and changed the dividend policy to increase payouts.
Polymetal expects to produce 1.05 million ounces of gold equivalent this year, 5 percent more than previously forecast, the St. Petersburg-based company said today in a statement, citing a “strong performance.” Third-quarter output jumped 48 percent from a year earlier to 317,000 ounces, while sales probably rose 42 percent to $530 million, Polymetal said.
Gold producers have expanded to benefit from prices that have advanced for 11 straight years. Polyus Gold International Ltd., which focuses on Russia, said in August that first-half profit more than doubled as output climbed, while Petropavlovsk Plc (POG) said yesterday that nine-month gold volumes rose 11 percent.
Polymetal’s growth this year has been led by the Dukat and Omolon mines, Chief Executive Officer Vitaly Nesis said by phone from St. Petersburg. The company cut its 2013 output target to 1.2 million ounces from 1.3 million ounces after shifting the start of its Mayskoye project to next April from December.
“If you look at the combined 2012-2013 production target, the overall reduction is small, just 50,000 ounces,” Nesis said. The company’s 2014 guidance of 1.4 million ounces remains unchanged.
Polymetal’s board revised its dividend policy to boost the payout to 30 percent of net income from 20 percent. That share is conditional on net debt staying below 1.75 times earnings before interest, taxes, depreciation and amortization, it said.
The new policy structure also allows the company to pay dividends twice a year “as London investors are accustomed to,” Nesis said.
The board may discuss introducing special dividends in December once capital-spending plans for 2013 are agreed on. “If we see that we’ve earned a big profit, with capex not that large, we’ll use the money to pay a special dividend,” Nesis said, declining to comment on the likely size of the payout.
Capital expenditure in 2012 will probably reach $300 million, compared with previous guidance of $250 million, Polymetal said.
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