Polymetal estimated export duty payments in 2024 at $100-130 million – Kommersant

Polymetal (MOEX: POLY) could pay $100-130 billion next year under the government’s flexible 5.5% export duty. At the same time, as part of the export duty for precious metals at the same rate, Polymetal will pay $30-40 million from EBITDA in 2023. This follows from the financial reporting companies.

In addition, as Polymetal reports, the company’s free cash flow due to the duty will decrease by $25–35 million this year and by another $70–100 million in 2024. When calculating losses in reporting, Polymetal also used the dollar exchange rate at the level of 90 rubles. As part of the windfall tax, the company will pay another 600 million rubles. This amount will be reported as part of income taxes for 2023.

The export duty will be in effect until the end of 2024. The government introduced export duties from October this year to protect the domestic market. Copper, zinc, aluminum, and gold were subject to duties. At the dollar exchange rate from 80 to 85 rubles. the duty will be 4%, at an exchange rate of 85-90 rubles – 4.5%, at a dollar from 90 to 95 rubles – 5.5%. The highest duty of 7% will be applied at an exchange rate above 95 rubles.

In the first six months, the company’s adjusted EBITDA grew by 31% year-on-year, to $559 million. Of this amount, $200 million, or 36%, relates to Kazakhstan. Adjusted EBITDA margin in this country reached 51%. Another $359 million, or 64%, relates to Russian assets with the same profitability ratio of 39%. Total adjusted EBITDA margin increased to 43% (41% last year).

Adjusted net profit increased by 28%, to $261 million, net profit – to $190 million (a year earlier there was a net loss of $321 million). Revenue grew by 25%, to $1.315 billion. Of this amount, $393 million (30%) relates to operations in Kazakhstan, $922 million (70%) – in Russia.

The average selling price of gold increased by 3%, the selling price of silver did not change. Gold sales increased by 25% year-on-year, to 570 thousand ounces. Silver sales increased 19% to 10.4 million ounces.

The company’s cash costs increased by 11% year-on-year to $944 per gold equivalent ounce. This is below the $950-$1,000 annual cost forecast. Total cash costs remained almost unchanged at $1,386 per GE ounce. Capital expenditures also remained almost unchanged at $375 million.

Net cash inflow from operating activities amounted to $35 million (a year earlier – net outflow of $405 million). This is due to an inflow of $140 million from Kazakhstan enterprises and an outflow of $105 million from Russian enterprises. During trading on the Moscow Exchange, as of 15:16 Moscow time, Polymetal shares grew by 2.71%.

By data analysts, export duties of 4–7% tied to the ruble exchange rate could affect 46% of agricultural exports. Analysts estimate fees from market participants at 125 billion rubles. in year.

Read more about the risks of export restrictions in the material “Corrosive duties”.

Anastasia Larina