Shares in FTSE 100 precious metal miner Polymetal International (POLY) gained 2.9% to £14.80 as it managed to cash in on the jump in the gold price in 2020 by reporting record earnings.
The company also hiked its annual shareholder payout 57%, declaring a full-year dividend of $1.29 per share – equivalent to a roughly 6.2% yield – as its net earnings for the year to 31 December 2020 soared 125% to $1.09 billion, up from $483 million year-on-year.
Like other gold miners, Polymetal’s share price has been in decline since hitting a high of over £20 in August. The stock’s performance has largely tracked the gold price, which has retreated from $1,950 per ounce records six months ago as investors bet on improved chances of a global economic recovery following the emergence of multiple Covid-19 vaccines.
Gold is currently trading around the $1,725 mark.
‘RECORD EARNINGS AMIDST CHALLENGING BACKDROP’
Polymetal’s revenue jumped 28% to $2.87 billion after average realised gold and silver prices tracked market dynamics and, while falling back in the latter stages of the year, still increased by 27% overall in 2020 for both metals.
The Russian miner’s average realized gold price in 2020 was $1,797 per ounce, up from $1,411 in 2019, and compares to an all-in sustaining cost of $874 per ounce. The company’s gold sales volumes rose 2% to 1.39 million ounces, while silver sales fell 13% to 19.3 million ounces.
‘We are pleased to report record net earnings for the year amidst a challenging global backdrop,’ chief executive Vitaly Nesis said.
‘A strong operating performance, a favourable commodity price environment and stable cost performance underpinned a significant increase in the group's cash flow and dividends whilst achieving a material reduction in leverage.’