Polymetal International plc (POLY)
Polymetal International plc
Half-year report for the six month ended 30 June 2022
“Polymetal continued to maintain operational stability in 1H 2022 despite operating in a persistently challenging external environment. Significant disruption in traditional supply chains and sales channels constrained cash flow generation and led to an increase in net debt. The management team continues to focus on ensuring long-term business viability and value creation”, said Vitaly Nesis, Group CEO, commenting on the results.
DIVIDENDS AND PROPOSED EXCHANGE OFFER
The Board has carefully evaluated the liquidity and solvency of the business in light of multiple external uncertainties. Taking into account significant decline in operating cash flows, challenges in establishing new sales channels and the short-term liquidity headwinds, the Board decided to permanently cancel full-year 2021 dividend. Given the continuing impact of these external uncertainties, the Board does not propose any interim 2022 dividends to allow the Group to strengthen its cash position and enhance its resilience in a highly volatile environment.
Payment of dividends in the future will also depend on the ability to unblock shares which are currently held through the National Settlement Depositary (NSD), which the Company estimates to be, in aggregate, approximately 22% of the Company’s issued share capital. Until a solution is found, the Board is not minded to propose any corporate action or dividend in which such a sizeable proportion of the Company’s shareholder base cannot participate.
Polymetal has today announced its intention to conduct an exchange offer. The exchange offer invites shareholders whose rights have been affected by the sanctions imposed on NSD, subject to fulfilling eligibility criteria, to tender such shares for exchange, in consideration for the issuance of a certificated share, on a one-for-one basis.
The exchange offer is subject to shareholder approval at a General Meeting which will be held at 10am (BST) on Wednesday 12 October 2022 at etc.venues Fenchurch Street, 8 Fenchurch Place, London.
Further details of the exchange offer can be found in the Company’s announcement in connection with the exchange offer, as well as the shareholder circular and notice of General Meeting, which has been published today.
UPDATE ON THE POTENTIAL MODIFICATION OF ASSET HOLDING STRUCTURE
As previously announced, the Company has been considering a potential modification of its asset holding structure which would ensure distinct ownership in the various jurisdictions in which the Company operates.
On 19 July 2022, the Company announced that it was evaluating the potential disposal of the Company’s assets located in the Russian Federation (the Potential Transaction), with the primary objective of restoring shareholder value by seeking to allow the market to appropriately value the Company’s Kazakhstani assets and de-risk its ongoing operations.
On 5 August 2022, a Decree of the President of the Russian Federation #520 (the Decree) was issued. The Decree imposes a prohibition, unless explicit presidential authorisation is obtained, on the sale of certain Russian assets, including all gold mining companies, if such assets are owned or controlled by residents of countries which the Russian Federation considers “unfriendly”. The jurisdiction of Jersey, where Polymetal International plc is incorporated, is currently included in the list of jurisdictions deemed to be ”unfriendly” by the Russian Federation.
The Company has taken steps to analyse the impact, including any legal implications, that the Decree may have on the Company’s ability to proceed with the Potential Transaction. Following initial discussions with its legal advisers, management believes that the Decree has added significant restrictions on its ability to execute such a transaction.
The Company continues to evaluate all available options to modify its asset holding structure in order to maximise shareholder value. Potential transaction structure include, among others, a potential re-domiciliation of the parent company, Polymetal International plc, to a “friendly” jurisdiction, a move which could unblock the ability to execute further corporate actions. No decision has been made in relation to the various options available to the Company.
The Company confirms that any actions will be compliant with all applicable international sanctions, counter-sanctions and regulatory requirements.
A further announcement will be made as appropriate.
Conference call and webcast
The Company will hold a conference call and webcast on Thursday, 22 September 2022 at 12:00 London time (14:00 Moscow time).
To participate in the call, please dial:
From the UK:
+44 330 165 4012 (local access)
0800 279 6877 (toll free)
From the US:
+1 929 477 0324 (local access)
0800 458 4121 (toll free)
If you wish to join the call from Russia please use the webcast link below.
To participate in the call from other countries please choose one of the local lines above.
Conference code: 2499630
To participate in the webcast follow the link: https://www.webcast-eqs.com/polymetal2022092212.
Please be prepared to introduce yourself to the moderator or register.
A recording of the call will be available at +44 (0)330 165 3993 (from the UK), +1 719 457 0820 (from the USA), access code 2499630, from 15:00 London time Thursday, 22 September, till 15:00 London time Thursday, 29 September 2022. Webcast replay will be available on Polymetal’s website (www.polymetalinternational.com) and at https://www.webcast-eqs.com/polymetal2022092212.
This release may include statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements speak only as at the date of this release. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would”, “could” or “should” or similar expressions or, in each case their negative or other variations or by discussion of strategies, plans, objectives, goals, future events or intentions. These forward-looking statements all include matters that are not historical facts. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the company’s control that could cause the actual results, performance or achievements of the company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the company’s present and future business strategies and the environment in which the company will operate in the future. Forward-looking statements are not guarantees of future performance. There are many factors that could cause the company’s actual results, performance or achievements to differ materially from those expressed in such forward-looking statements. The company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
 The financial performance reported by the Group contains certain Alternative Performance Measures (APMs) disclosed to compliment measures that are defined or specified under International Financial Reporting Standards (IFRS). For more information on the APMs used by the Group, including justification for their use, please refer to the “Alternative performance measures” section below.
 Adjusted for the after-tax amount of impairment charges, write-downs of metal inventory, foreign exchange gain and other change in fair value of contingent consideration.
 On a cash basis, representing cash outflow on purchases of property, plant and equipment in the consolidated statement of cash flows.
 Totals may not correspond to the sum of the separate figures due to rounding. % changes can be different from zero even when absolute amounts are unchanged because of rounding. Likewise, % changes can be equal to zero when absolute amounts differ due to the same reason. This note applies to all tables in this release.
 Defined in the “Alternative performance measures” section below.
 In accordance with IFRS, revenue is presented net of treatment charges which are subtracted in calculating the amount to be invoiced. Average realised prices are calculated as revenue divided by gold and silver volumes sold, excluding effect of treatment charges deductions from revenue.
 1H 2021: Final dividend for FY 2020 paid in May 2021.
 1H 2021: Interim dividend for FY2021.
 As at 31 December 2021.
 On a last twelve months basis. Adjusted EBITDA for 2H 2021 was US$ 805 million.
 Based on 80:1 Au/Ag conversion ratio and excluding base metals. Comparative data for 2021 restated accordingly (120:1 Au/Ag conversion ratio was used previously).
 Based on actual realised prices.
 LTIFR = lost time injury frequency rate per 200,000 hours worked.
File: Polymetal: Half-year report for the six month ended 30 June 2022
|OAM Categories:||1.2. Half yearly financial reports and audit reports/limited reviews|
|EQS News ID:||1447785|
|End of Announcement||EQS News Service|