In view of the strong balance sheet and underlying business performance in 2020, the Polymetal International Board has proposed a final dividend of US$ 0.89 per share (approx. US$ 419 million), which includes US$ 0.74 per share representing 50% of underlying net earnings for the 2H 2020 and a discretionary payment of US$ 0.15 per share adjusting the total dividend for 2020 for 100% of free cash flow for the FY 2020, in accordance with Polymetal's revised dividend policy. This will bring the total dividend declared for FY 2020 to US$ 608 million (2019: US$ 385 million), which represents US$ 1.29 per share, up 57% compared to US$ 0.82 per share in 2019.
Other financial highlights include:
- In 2020, revenue increased by 28%, totalling US$ 2,865 million (2019: US$ 2,241 million). Average realised gold and silver prices tracked market dynamics and increased by 27% for both metals. Gold sales were 1,392 Koz, up 2% year-on-year, while silver sales were down 13% to 19.3 Moz, largely in line with production volume trends.
- Group Total Cash Costs ("TCC") for the full year were US$ 638/GE oz, down 3% year-on-year, and 2% below the lower end of the Company's full year guidance of US$ 650-700/GE oz mostly due to a weakness in the Russian Rouble and the Kazakh Tenge which outweighed additional COVID-related costs and a price-driven increase in royalties.
- All-in Sustaining Cash Costs ("AISC")1 remained broadly unchanged from 2019 at US$ 874/GE oz, up 1% year-on-year and within the Company's full year guidance of US$ 850-900/GE oz, as the Company has accelerated pre-stripping and mine fleet renewals against a backdrop of higher commodity prices.
- Adjusted EBITDA was US$ 1,686 million, a 57% increase over 2019, driven by higher production volumes, higher commodity prices, and lower cash costs. Adjusted EBITDA margin increased by 11 p.p. and reached an all-time high of 59% (2019: 48%).
- Net earnings were a record US$ 1,086 million (2019: US$ 483 million), with a basic EPS of US$ 2.30 per share (2019: US$ 1.02 per share), reflecting the increase in operating profit. Underlying net earnings increased by 82% to US$ 1,072 million (2019: US$ 586 million).
- Capital expenditure was US$ 583 million, up 34% compared to US$ 436 million in 2019 and 8% above guidance. As previously announced, the increase is mainly related to accelerated spending across the project portfolio in a bid to neutralise the impact of the pandemic on project schedules and an increase in capitalised underground development and pre-stripping, aimed at ensuring operational flexibility against the backdrop of heightened epidemiological risks. The Group is on track for development activities at both POX-2 and Nezhda.
- Net debt decreased to US$ 1,351 million during the period (31 December 2019: US$ 1,479 million), representing a Net debt/Adjusted EBITDA ratio of 0.80x (2019: 1.38x), significantly below the Group's target leverage ratio of 1.5x. The Company generated significant free cash flow, which amounted to US$ 610 million (2019: US$ 256 million), supported by a net cash operating inflow of US$ 1,192 million (2019: US$ 696 million).