Polyus - Healthy 4Q17 IFRS, Priced Attractively at Spot Gold
Polyus today released its 4Q17 IFRS results. The headline numbers came bang in line with our and the market expectations. Despite flat revenues Q-o-Q $743 mln and a 15% decrease in reported TCC to $324 /oz, 4Q17 EBITDA was down 2% Q-o-Q to $465 mln, mainly due to seasonally higher SG&A expenses, which increased to $71 mln from $48 mln in 3Q17.We reiterate our preference for Polyus in terms of asset quality, but for those who see the situation around the core shareholder (in light of an ongoing investigation in France) as a risk that is difficult to quantify, Polymetal would be a good option.
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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