Polyus - 4Q17 Preview: Watch Cost Performance
Polyus will report 4Q17 IFRS results tomorrow.The company has already reported estimated revenues of around $734 mln for 4Q17. Including other revenue streams, we project headline revenues of more than $740 mln. Based on the company's 4Q17 operating results, we anticipate a slight drop in cash costs, though a seasonal rise in SG&A could keep EBITDA flat. We expect 4Q17 headline EBITDA of $465 mln, a little below the previous quarter, with an EBITDA margin of 63% versus 64% in 3Q17.
It reported net debt at $3,077 mln as of end December (down 5% Q-o-Q). Therefore, leveraged FCF should come in slightly above $70 mln (down 33% Q-o-Q), pressured by heavy capex and ongoing stripping expenditures.
The company will host a conference call after the results and has arranged a capital markets day for March 20. Polyus's closest peer, Polymetal, has warned investors about rising cost inflation on the back of the stronger ruble and higher diesel costs, and it will be important to see whether Polyus is experiencing the same headwinds.
PJSC Polyus is an open joint stock company based in Russia. Co. is engaged in operations as a gold production company. Co.'s major assets are: in Krasnoyarsk region, Olympiada deposit as well as Blagodantoe, Titimukhta, Tyrada, Olenii, Razdolinskaya, Zyryanovskaya and Panimba fields; in Irkutsk region, Zapadnoe, Verninskoe, Pervenets, and Chertovo Koryto and Mukodek goldfields as well as some 94 placer deposits; in Magadan region, Natalka deposit and smaller Degdekan and Vostochnoye fields; in the Republic of Sakha (Yakutia), Kuranakh ore body and Kyutchus field as well as 50% interest in the giant Nezhdaninskoye field; and in Amur region, Bamskoe gold field.CJSC Deloitte & Touche CIS
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
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