Slide 1: PJSC Polyus 1Q 2017 Financial results
PJSC Polyus 1Q 2017 Financial results
Slide 2: 1Q 2017 key highlights
1Q 2017 key highlights Continued strong top-line performance Gold sales increased 22% y-o-y at 487 koz Revenue amounted to $609 mln, compared to $511 mln in 1Q16, mainly due to a higher sales volume Superior profitability profile The Group’s TCC and AISC increased 6% y-o-y to $380/oz and 8% y-
Slide 3: Financial results
Financial results a, '~¢
Slide 4: 1Q17 financial highlights
Financial Results 1Q17 financial highlights Key highlights 1Q17 1Q16 change, % FY16 Gold production, koz 450 384 17% 1,968 Average realised refined gold price excl. SPPP1, $/oz 1,217 1,186 3% 1,250 Average realised refined gold price incl. SPPP, $/oz 1,258 1,260 (0%) 1,287 Total cash cost (TCC), $/o
Slide 5: Revenue analysis
Financial Results Revenue analysis Sales by mine dynamics, koz Revenue breakdown by mine, 1Q17, % 268 Other Kuranakh 1% 8% 167 Verninskoye 11% 124 110 53 54 1Q17 38 41 Olimpiada 31 $609 mln 54% n.a. Olimpiada Blagodatnoye Titimukhta Verninskoye Kuranakh Krasnoyarsk cluster Blagodatnoye 80% 1Q16 1Q17
Slide 6: TCC & AISC performance
Financial Results TCC & AISC performance TCC dynamics by mines, $/oz AISC dynamics by mines, $/oz 800 752 743 585 700 610 478 576 564 518 600 401 393 399 389 500 472 393 306 268 400 300 200 100 0 Olimpiada Blagodatnoye Verninskoye Kuranakh Olimpiada Blagodatnoye Verninskoye Kuranakh 1Q16 1Q17 1Q16 1
Slide 7: Polyus TCC curve
Financial Results Polyus TCC curve Polyus TCC curve 1Q17 TCC, $/oz 600 500 The average 1Q17 TCC amounted to 380$/oz 400 $380/oz 300 Verninskoye Kuranakh 200 Olimpiada Blagodatnoye 100 0 Polyus cumulative production, koz 0 100 200 300 400 Highlights Global TCC curve1 1,200 TCC, $/oz Group TCC incre
Slide 8: Polyus AISC curve
Financial Results Polyus AISC curve Polyus AISC curve 1Q17 AISC, $/oz 800 700 The average 1Q17 AISC amounted to $586/oz 600 $586/oz 500 Verninskoye Kuranakh 400 300 Blagodatnoye Olimpiada 200 100 0 Polyus cumulative production, koz 0 100 200 300 400 Highlights Global AISC curve1 The Group’s AISC d
Slide 9: Operating cash costs
Financial Results Operating cash costs The Group’s cash operating costs breakdown by item, 1Q16/1Q17, $ mln Other Power Other Outsourced mining services 5% 4% Labour 1% 7% 32% Power Labour 4% 28% Fuel 10% Fuel 9% An increase of 11% y-o-y in the 1Q16 1Q17 Group’s cash operating costs $165 mln $148 ml
Slide 10: Adjusted EBITDA performance
Financial Results Adjusted EBITDA performance Adj. EBITDA and adj. EBITDA margin, 1Q17 Adj. EBITDA bridge, $ mln 250 90% 76% 450 92 383 80% 400 200 58% 70% 3 (42) 59% 350 330 51% 60% 300 150 50% 250 40% 200 194 100 30% 150 20% 50 120 10% 100 50 0 38 26 – (10%) - Olimpiada Blagodatnoye Verninskoye Ku
Slide 11: Cash flow dynamics
Financial Results Cash flow dynamics 1Q17 cash flow bridge, $ mln 2,5 00 282 2,0 00 1,740 (15) 1,487 1,5 00 18 (538) 1,0 00 500 - Cash & CE Operating CF Investing CF Financing CF Effect of foreign Cash & CE 31-Dec-16 exchange rate 31-Mar-17 changes In 1Q17, net operating cash flow was largely unch
Slide 12: Net working capital dynamics
Financial Results Net working capital dynamics 1Q17 net working capital bridge, $ mln Cash inflow $8 mln 580 40 560 526 540 18 520 500 495 12 480 (5) (33) 460 440 420 2016 NWC Inventories Deferred expenditures Receivables Payables Translation + Mar-2017 NWC non-OCF items The Group registered $8 ml
Slide 13: Capex analysis
Financial Results Capex analysis Capex breakdown, $ mln $ mln 1Q17 1Q16 change, % Natalka 76 37 105% Olimpiada 14 6 133% Blagodatnoye 3 7 (57%) Verninskoye 5 2 150% Alluvials 7 3 133% Kuranakh 8 9 (11%) Exploration 1 1 - Other (including power projects) 14 31 (55%) Total 128 96 33% In 1Q17, capex
Slide 14: Debt maturity profile as of the end of 1Q17
Financial Results Debt maturity profile as of the end of 1Q17 Polyus has comfortable debt maturity profile and proactively manages upcoming redemptions As of the end of 1Q17, the debt portfolio is represented by $1.25 bln Sberbank loan (2023), Eurobonds (2020, 2022 & 2023) in the overall amount
Slide 15: Debt structure and interest rate dynamics
Financial Results Debt structure and interesting rate dynamics1 Debt breakdown Debt breakdown Debt breakdown by source by interest rates by currency2 $1.25 bln Floating Bank loans Sberbank loan (2023) rate (23%) (27%) 28% RUB 20% RUB bonds (6%) Fixed rate 72% Eurobonds USD (44%) 80% Debt outstanding
Slide 16: Net debt position
Financial Results Net debt position By the end of 1Q17, the Group’s net debt stood at $3,128 mln, down 3% from $3,241 mln as of 31 December 2016 The net debt/adjusted EBITDA ratio as of 31 March 2017 decreased to 2.0x, compared to 2.1x as of the end of 2016, due to both the decrease in net debt
Slide 17: Operating results
Operating results a, '~¢
Slide 18: Operational Performance: Key highlights
Operational Performance Key highlights Total gold output increased 17% y-o-y to 450 koz driven by higher production volumes at Olimpiada, Blagodatnoye and Kuranakh In 1Q17, volumes of ore processed increased 4% y-o-y to 6.6 mt as a result of the throughput capacity expansion at Olimpiada, Blagod
Slide 19: Olimpiada
Operational Performance Olimpiada Operations 1Q17 1Q16 change, % TCC 1Q 2016 - 1Q 2017, $/oz Rock moved, kt 14,798 14,661 1% Strip ratio, t/t 4.0 9.9 (60%) (2%) Ore mined, kt 2,974 1,340 N.A. Grade in ore mined, g/t 4.1 3.2 28% 401 393 Ore processed, kt1 2,930 2,509 17% Grade in ore processed, g/t 3
Slide 20: Blagodatnoye
Operational Performance Blagodatnoye Operations 1Q17 1Q16 change, % TCC 1Q 2016 - 1Q 2017, $/oz Rock moved, kt 17,192 10,711 61% Strip ratio, t/t 4.8 2.7 77% 14% Ore mined, kt 2,945 2,874 2% Grade in ore mined, g/t 2.0 2.0 0% 1 Ore processed, kt 1,977 1,840 7% 306 Grade in ore processed, g/t 2.0 2.1
Slide 21: Verninskoye
Operational Performance Verninskoye Operations 1Q17 1Q16 change, % TCC 1Q 2016 - 1Q 2017, $/oz Rock moved, kt 4,547 4,429 3% Strip ratio, t/t 4.6 4.4 5% (3%) Ore mined, kt 815 827 (1%) Grade in ore mined, g/t 2.2 2.3 (6%) 399 Ore processed, kt 1 591 586 1% 389 Grade in ore processed, g/t 2.6 2.7 (4%
Slide 22: Kuranakh
Operational Performance Kuranakh Operations 1Q17 1Q16 change, % TCC 1Q 2016 - 1Q 2017, $/oz Rock moved, kt 7,216 6,294 15% Strip ratio, t/t 4.5 5.1 (11%) 22% Ore mined, kt 1,300 1,030 26% Grade in ore mined, g/t 1.2 1.3 (7%) 585 Ore processed, kt1 1,114 998 12% 478 Grade in ore processed, g/t 1.3 1.
Slide 23: Natalka
Operational Performance Natalka Operations 1Q17 1Q16 change, % Rock moved, kt 3,276 420 N.A. Strip ratio, t/t 2,697 158 N.A. Ore mined, kt 578 255 127% Grade in ore mined, g/t 0.88 1.2 (26%) 1 Ore processed, kt 17 11 49% Grade in ore processed, g/t 1.0 1.5 (30%) Recovery, % 76.1% 72.9% 3.2 ppts Gold
Slide 24: Appendix
Appendix af
Slide 25: Strategic Price Protection Programme (SPPP) overview
Appendix Strategic Price Protection Programme (SPPP) overview Primary part Secondary part Callable amount, 285 420 775 440 380 25 0 0 0 0 495 285 915 300 koz 2,000 Average gold price, $/oz (LBMA) 1,800 1,714 1,687 1,611 1,602 1,620 1,580 1,600 1,531 1,533 1,533 1,498 1,491 1,492 1,422 1,450 1,450 1,
Slide 26: Balance sheet highlights
Financial Statements Balance sheet highlights Assets, $ mln 1Q17 FY16 Non-current assets 3,860 3,371 Property, plant and equipment 3,426 2,938 Derivative financial instruments and investments 35 57 Inventories 269 264 Deferred tax assets 90 75 Other 40 37 Current assets 2,067 2,295 Inventories 403 3
Slide 27: Balance sheet highlights (cont.)
Financial Statements Balance sheet highlights (cont.) Equity and Liabilities, $ mln 1Q17 FY16 Share capital 7 7 Additional paid-in capital 2,294 2,288 Treasury shares (3,713) (3,712) Cash flow hedge revaluation reserve 3 12 Translation reserve (2,742) (2,720) Retained earnings 4,121 3,617 Equity att
Slide 28: Profit and loss statement highlights
Financial Statements Profit and loss statement highlights $ mln 1Q17 1Q16 y-o-y FY16 Revenue from gold sales 600 505 19% 2,429 Other revenue 9 6 50% 29 Total revenue 609 511 19% 2,458 Cost of gold sales (225) (173) 30% (891) Other cost of sales (9) (6) 50% (28) Total cost of sales (234) (179) 31% (9
Slide 29: Cash flow highlights
Financial Statements Cash flow highlights $ mln 1Q17 1Q16 y-o-y FY16 Profit before income tax 576 377 53% 1,771 Amortisation and depreciation 39 30 30% 148 (Gain) / loss on derivative financial instruments and investments (108) 13 N.A. (119) Finance costs 63 32 97% 145 Interest income on bank deposi
Slide 30: Disclaimer
Disclaimer The information contained herein has been prepared using information available to PJSC Polyus (“Polyus”) at the time of preparation of the presentation. External or other factors may have impacted on the business of Polyus and the content of this presentation, since its preparation. In ad