Key performance indicators

Financial KPIS Operating KPIS Sustainability KPIS
+15% (US$m)
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Top-line indicator, heavily depends on commodity prices but also driven by delivery of production volumes.

In 2016, revenue grew by 10% year-on-year driven by an 8% increase in the average realised gold price and an 11% increase in the average silver price. Gold and silver sales volumes both broadly followed the production dynamics.

Total cash cost
+15% (US$/GE oz)
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High-grade, full capacity utilisation and continued operating improvement, as well as foreign exchange rates and oil price are the key drivers of total cash costs (TCC) per ounce.

TCC were up 6% year-on-year and within original guidance of US$ 550-575/GE oz. The planned grade decline at some mature operations combined with domestic inflation in Russia had a moderate negative impact on cost levels. This was largely offset by the robust operating performance at Voro, Varvara and Omolon.

All-in sustaining cash cost
+15% (US$/GE oz)
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Our focus on high grade and low capital intensity ensures a low level of all-in sustaining cash costs (AISC).

AISC were up 6% year-on-year, driven mostly by an increase in TCC during the period and Russian Rouble appreciation against the US Dollar in the second half of the year.

Adjusted EBITDA
-2% (US$m)
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Adjusted EBITDA is a key measure of the Company’s operating performance and cash generation capacity (excluding impact of financing, depreciation and tax) and a key industry benchmark allowing to perform peer comparison.

In 2016, Adjusted EBITDA increased by 15% year-on-year, resulting in an Adjusted EBITDA margin of 48%. The increase was mainly driven by growth in the average realised gold and silver prices, which was partially offset by a 6% increase in TCC.

Free cash flow
-44% (US$m)
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A key indicator in any business. Generating a healthy free cash flow enables us to provide significant cash returns for shareholders.

The Company continued to deliver a strong operating performance, driving solid cash flow. In 2016, Polymetal generated significant pre-acquisition free cash flow, which amounted to US$257 million.

Dividends declared
+19% (US$/share)
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Our aim is to deliver substantial dividends to our shareholders at all stages of both the commodity cycle and our investment cycle.

During 2016, Polymetal paid a total of US$158 million in dividends, representing final dividends for FY 2015, interim dividends for the 1H 2016 and special dividends for 2016 paid on the back of strong free cash flow generation and a comfortable leverage level.

Capital expenditure
+44% (US$m)
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Our rigorous approach to all investment decisions ensures tight controls on capital expenditure, boosting return on invested capital for shareholders and sustainable development for the business.

Capital expenditure increased by 32% to US$271 million. It was below the reduced guidance of US$310 million, due to favourable exchange rates early in 2016.

Underlying net income
-1% (US$m)
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Underlying net income is a comprehensive benchmark of our core profitability excluding foreign exchange gains/losses and impairments.

Underlying net earnings (adjusted for the after-tax amount of write-down of metal inventory to net realisable value, foreign exchange gains/losses and change in fair value of contingent consideration liability) were US$382 million, an increase of 31% compared with 2015.

Gold equivalent production
0% (Koz)
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Annual targets for gold equivalent production are an indicator to the market of our confidence in our operating performance — and one that we regularly exceed.

Compared with 2015, annual gold equivalent production remained largely flat at 1,269 Koz, meeting our increased production guidance for the fifth consecutive year.

Ore reserves
-5% (Moz)
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Both extending mine life through near-mine exploration and new discoveries from greenfield exploration contribute to the Company’s long-term growth prospects.

Year-on-year ore reserves were 19.8 Moz, a 5% reduction, which was due mainly to mining depletion and a downgrade at Varvara, which were partially offset by reserve additions from the new acquisition at Komar, Dolinnoye and an upgrade at Svetloye.

Lost time injury frequency rate
-21% (LTIFR)
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Our commitment, above anything else, is to have no fatalities. Despite some improvements over previous years, we regrettably failed in that objective in 2017, with two fatalities, and it is clear we have more work to do in this area. Safety begins with preparation: anticipating incidents before they happen, and improving ongoing training to identify risks and respond appropriately when the unexpected happens.

Nevertheless, we have seen a visible improvement in our health and safety performance, with a 21% reduction in LTIFR compared to 2016, and a decrease in the number of fatalities from four to two. The Company believes these improvements are attributable to our efforts such as the implementation of our Critical Risks Management System, reducing risks, and our commitment to the ultimate goal of zero fatalities at our operations.

GHG emissions intensity
-7% (CO2 equivalent tonnes per 10 Kt of ore processed)
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Finding renewable energy sources is a priority if we are to lower our greenhouse gas (GHG) emissions and manage carbon emissions. Heat and electricity from our diesel generators, as well as our mining fleet operations, produce GHG emissions. The burning of natural gas and coal and the use of landfill also contribute to our GHG footprint. We measure and monitor our CO2 emissions using established international methodology.

To effectively manage our greenhouse gas emissions, we conduct an inventory assessment each year and report both direct and indirect emissions. In 2017, direct GHG emissions amounted to 281 Kt, compared to 268 Kt in 2016. In 2017, we introduced a number of measures to reduce GHG emissions, including converting all lighting to LED, and equipping diesel-powered generators with a heat recovery system. We also began to develop our Climate Management System.