Polyus Finance Plc: pjsc polyus financial results for the second half of 2024 and full year 2024

London (pta034/22.04.2025/15:35 UTC+2)

PJSC Polyus

Financial results for the second half of 2024 and full year 2024

PJSC Polyus (MOEX — PLZL) ("Polyus", the "Company", and together with the Company subsidiaries, the "group") has today released its consolidated financial results for 2H 2024 and FY 2024.

FY 2024 highlights

1. Total gold sales volumes in 2024 increased 11% compared to the previous year and amounted to 3,107 thousand ounces, reflecting higher production volumes across all operating assets of the group except for Irkutsk business unit. A difference between sales and the total gold output (3,002 thousand ounces) reflects planned sales of previously accumulated gold.
2. Revenue for the full year amounted to $7,343 million, up 40% compared to 2023. This is attributable to the aforementioned increase in gold sales volumes and the higher average realized gold price compared to the previous year.
3. The group's TCC for 2024 increased 6% year-on-year to $383 per ounce. This growth reflects an increase in the MET due to higher average realized gold price during 2024 and introduction of the additional MET ratio since 1 June 2024. The year-on-year increase in TCC was also driven by the ongoing consumables price inflation, wage indexation, increase in electricity tariff, as well as lower grades in ore processed at Olimpiada and Irkutsk business unit. These factors were partially offset by higher head grades at Blagodatnoye and Natalka, rouble depreciation and an increase in by-product credit of antimony-containing flotation concentrate, as well as improved recovery rate at Natalka due to launch of the flotation circuit at the Mill.
4. Adjusted EBITDA in 2024 rose 49% year-on-year reaching new historical high of $5,677 million and followed by EBITDA margin expansion. Main drivers were higher gold sales volumes and higher gold prices during the reporting period
5. Capital expenditures ("capex") increased from $1,023 million in 2023 to $1,257 million in 2024, as a result of higher capital spending across nearly all business units.
6. The net debt (incl. derivatives)/adjusted EBITDA ratio declined to 1.1x at the end of 2024, compared to 1.9x at the end of 2023, reflecting lower net debt position and adjusted EBITDA growth over the last twelve months.

2H 2024 highlights

1. Total gold sales volumes in the second half of 2024 rose to 1,850 thousand ounces, compared to 1,257 thousand ounces in the first half of 2024.This growth was driven by higher production volumes at Natalka and Kuranakh, as well as planned sales of previously accumulated gold, primarily in the form of antimony-containing floatation concentrate.
2. Revenue for the second half of 2024 moved up 69% half-on-half and stood at $4,610 million, reflecting the aforementioned growth in gold sales volumes as well as the higher average realized gold price, compared to the first half of 2024.
3. The group's TCC for the second half of 2024 decreased 16% half-on-half to $355 per ounce. This was driven by an increase in the share of lower-cost flotation concentrate in total gold sold and higher by-product credit from sales of antimony-rich flotation concentrate at Olimpiada ($65 per ounce in 2H2024, compared to $6 per ounce in 1H2024) as well as rouble depreciation. The aforementioned positive factors were partially offset by an increase in the MET due to higher average realized gold price and introduction of the additional MET ratio since 1 June 2024, as well as wage indexation.
4. Adjusted EBITDA for the second half of 2024 amounted to $3,656 million, an 81% increase compared to $2,021 million in the first half of 2024, as a result of higher gold sales volumes, higher gold prices during the reporting period and lower TCC on a per ounce basis.
5. Capital expenditures ("capex") for the second half of 2024 rose to $816 million, from $441 million in first half of 2024. This increase reflects higher capital spending across all business units.

OUTLOOK FOR 2025

Production guidance

Polyus anticipates gold production for the full year 2025 to be within the range of 2.5 - 2.6 million ounces. The year-on-year decline in production is expected to be mainly driven by lower grades in ore processed at Olimpiada, since Polyus completed mining activities at the fourth stage of the Vostochny pit and intensified stripping activities at the fifth stage of the pit. This process will also continue through 2026 and 2027 after which grades at Vostochny pit will recover. Thus, the Company also expects its annual production to be between 2.5 and 2.6 million ounces in 2026-2027. Meanwhile the Company is focused on launching production on its greenfield projects (Sukhoi Log, Chulbatkan and Chertovo Koryto), which is expected to bring the Company's annual output to 6 million ounces of gold by 2030.

TCC guidance

Polyus expects a year-on-year increase in TCC and has set a guidance range of $525 - 575/oz for 2025. Despite the ongoing implementation of cost-containment initiatives across the group, the Company anticipates that the following factors will negatively affect the group's cost performance in 2025 compared to 2024:

• A change in the structure of the group's gold output. Polyus expects a reduction in the share of lower-cost Olimpiada in the Company's total gold production structure attributed to a planned decline in grades in ore mined following the completion of mining activities at the fourth stage of the Vostochny pit.
• Absence of lower-cost flotation concentrate from Olimpiada in the total volume of gold sold and a decrease in by-product credit on the back of completion of mining of antimony-containing ore.
• An increase in the MET rate due to the introduction of the additional per ounce levy of 10% on the excess of the LBMA gold price over the level of $1,897/oz.
• Inflationary factors in key consumables and labour.

Capex guidance

The Company has set its capital expenses guidance in the range of $2,200-2,500 million.

The anticipated year-on-year increase in capex reflects the following factors:

• Active stage of Sukhoi Log project construction.
• Construction of the new 12.5 mtpa Kuranakh heap leaching complex and the extension of the existing 1.5 mtpa Kuranakh heap leaching facility to 5.0 mtpa.
• Transition to the implementation phase of Chulbatkan and Chertovo Koryto projects.
• Partial capex roll-over from 2024.
• Inflationary pressure.

Dividend update

The Board of Directors has resolved to update the company's dividend policy, aligning it more closely with today`s market environment and strategic objectives.

Under the updated framework, the Company will still target a dividend payout ratio of 30% of its EBITDA. Payments are targeted no less than twice annually, contingent upon a number of fundamental factors, ensuring compliance with investor interests and maintaining financial flexibility to support high-impact growth initiatives.

The Board of Directors (the "Board") may recommend to the General Shareholder Meeting to approve dividends exceeding the target payout ratio of 30% of EBITDA.

In addition it is expected that on the 10th March 2025 the Board of Directors will consider the dividend payment based on the results of 4Q 2024 and announce their recommendation for the Annual General Meeting of Shareholders ("AGM"). According to the dividend policy the total amount of dividends could amount to not less than 30% of the Company's EBITDA for the 4Q 2024 per the outstanding shares.

Corporate governance

The Company expects that the Board will consider the recommendation to the AGM to approve the new Board composition, which will include three Independent Directors.

Events after the reporting date

Stock split

The Extraordinary General Meeting of Shareholders ("EGM") held on 03 February 2025 approved the decision to split the Company's stock at a ratio of 1:10. The stock split is expected to be completed within 2 months from the EGM resolution approving the split.

After completion of the stock split procedure the nominal value of the stock will be reduced 10-fold, with a simultaneous 10-fold increase in the total number of shares outstanding. At the same time, the total share capital of the Company and the total par value of the shares owned by the shareholders will not change.

The Company believes that completion of the stock split will increase the liquidity of Polyus' shares and their accessibility, which will have a positive impact on the attractiveness of the Company's stock to a broader range of investors.

Comparative financial results

[1][2][3][4][5][6][7][8]

[1] Gold production is comprised of 2,791 thousand ounces of refined gold and 211 thousand ounces of gold in flotation concentrate in the 2024. Gold sold is comprised of 2,810 thousand ounces of refined gold and 297 thousand ounces of gold in flotation concentrate in the 2024.Both gold production and gold sold do not include 11.1 thousand ounces of alluvial gold of Razdolinskoye and Ugakhan deposits capitalized in consolidated financial statements.

[2] Adjusted net profit is defined by the group as net profit / (loss) for the period adjusted for impairment loss / (reversal of impairment), unrealised (gain) / loss on derivative financial instruments, foreign exchange (gain) / loss, gain on acquisition of subsidiaries and associated deferred and current income tax related to such items.

[3] Adjusted EBITDA is defined by the group as profit for the period before income tax, depreciation and amortisation, (gain) / loss on derivative financial instruments and investments (including the effect of the disposal of a subsidiary and subsequent accounting at equity method), finance costs, interest income, foreign exchange loss / (gain), impairment loss / (reversal of impairment), (gain) / loss on property, plant and equipment disposal, expenses associated with an equity-settled share-based payment plan, gain on acquisition of subsidiaries and special charitable contributions as required to ensure calculation of the Adjusted EBITDA is comparable with the prior period.

[4] Capital expenditure figures are presented on an accrual basis.

[5] TCC is defined by the group as the cost of gold sales, less property, plant and equipment depreciation and amortisation and change in allowance for obsolescence of inventory and adjusted by non-monetary change in inventory. TCC per ounce sold is the cost of producing an ounce of gold, which includes mining, processing and refining costs. The group calculates TCC per ounce sold as TCC divided by total ounces of gold sold for the period. The group calculates TCC and TCC per ounce sold for certain mines on the same basis, using corresponding mine-level financial information.

[6] AISC is defined by the group as TCC plus selling, general and administrative expenses, stripping activity asset additions, sustaining capital expenditures, unwinding of discounts on decommissioning liabilities, provision for annual vacation payment, employee benefit obligations cost, and change in allowance for obsolescence of inventory less amortisation and depreciation included in selling, general and administrative expenses. AISC is an extension of TCC and incorporates costs related to sustaining production and additional costs which reflect the varying costs of producing gold over the life-cycle of a mine. The group believes AISC is helpful in understanding the economics of gold mining. AISC per ounce sold is the cost of producing and selling an ounce of gold, including mining, processing, transportation and refining costs, general costs from both mine and alluvial operations, and the additional expenditures noted in the definition of AISC. The group calculates AISC per ounce sold as AISC divided by total ounces of gold sold for the period.

[7] Net debt is defined as non-current borrowings plus current borrowings less cash and cash equivalents and bank deposits. Net debt also includes assets and liabilities under cross-currency and interest rate swaps at the reporting date. Net debt excludes derivative financial instrument assets/liabilities other than cross-currency and interest rate swaps, site restoration and environmental obligations, deferred tax and other non-current liabilities. Net debt should not be considered as an alternative to current and non-current borrowings, and should not necessarily be construed as a comprehensive indicator of the group's overall liquidity.

[8] The group calculates net debt (incl. derivatives) to Adjusted EBITDA as net debt (including derivatives) divided by Adjusted EBITDA for the last twelve months

For the additional information please refer the below link https://data.fca.org.uk/artefacts/NSM/Portal/NI-000118280/NI-000118280.pdf

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