Mining giant Polymetal International said on Thursday that both difficulties and delays in setting up new sales channels had continued, resulting in a drop in cash-flow generation.
Polymetal stated gold sales from its Russian mines to Asian markets returned to a regular schedule after a significant Covid-related slowdown in April and May, with sales terms remaining “broadly consistent” with those received earlier.
However, the London-listed firm highlighted that sales logistics continued to face “significant challenges” due to Covid-19 restrictions in China and the impact of Russian sanctions, leading to slower inventory turnover and higher selling costs, with the gap between production and sales and the resulting finished goods inventory expected to peak in September.
Net debt increased to $2.3bn as of 1 June, up from $2.0bn on 31 March, driven by a large working capital increase and accelerated procurement.
Polymetal stated it was “continuously” evaluating the stability, liquidity, and solvency of the business in light of “multiple external uncertainties” but added that its operations in Russia and Kazakhstan continued undisrupted and maintained its full-year production guidance of 1.7m ounces for 2022.
As of 0900 BST, Polymetal shares were up 3.36% at 186.0p.
Reporting by Iain Gilbert at Sharecast.com
