Russia's largest gold miner, Polyus, has reported a 183% jump in H1 2024 profit to $1.58bn, thanks to record-high global gold prices and despite Russia currently being subject to a raft of sanctions from European nations and the US.
Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) in H1 2024 amounted to $2.021bn, a 20% increase compared with $1.6bn in H1 2023, reflecting higher average gold prices during the reporting period.
EBITDA is a useful measure of a company’s overall financial performance, but where possible should always be assessed together with other key performance indicators such as net income.
The quantity of gold sold in H1 2024 totalled 1.26 million ounces (moz), almost unchanged from H1 2023.
Polyus amassed around 210,000oz of gold content as inventory during the reporting period, largely in the form of floatation concentrate. These reserves will be gradually sold off in the second half of the year and will be accounted for in the group's financial statements for 2024, the company said.
The group's total cash cost for H1 2024 rose by 8% compared with the previous year, reaching $423/oz.
The cost increase was due to various factors including changes in the proportion of lower-cost flotation concentrate sold and an increase in mining costs due to higher refined gold prices.
Polyus also highlights the positive impact of the rouble depreciation during the reporting period and higher head grades at Blagodatnoye, Natalka and Kuranakh.
Polyus reported a 2% increase in gold production to 1.47moz in the year's first half. The company has revised its 2024 production forecast to 2.75–2.85moz from the previous range of 2.7–2.8moz.
Gold has increased in value by approximately 22% this year, reaching a high of well over $2,500 last week due to anticipated US interest rate reductions and concerns of a spreading conflict in the Middle East.
In 2023, the US and UK imposed sanctions against Polyus in retaliation for the Russian invasion of Ukraine, prompting the company to withdraw its depositary receipts from the London Stock Exchange.
