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Key performance indicators

Financial KPIS Operating KPIS Sustainability KPIS
Revenue
+10% (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
+6% (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
+6% (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
+15% (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
-2% (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
-27% (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
+32% (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
+31% (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
-14% (LTIFR)
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Significant efforts continue to be made in ensuring workplace safety and reducing LTIFR.

Despite the tragic loss of four our employees in workplace accidents in 2016, the number of overall fatalities reduced by 1.5 times year-on-year, our LTIFR decreased by 14% compared with 2015 and we reduced the level of the most significant risks that cause injuries by 50%.

GHG emissions intensity
+3% (CO2 equivalent tonnes per 10 Kt of ore processed)
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GHG emission intensity is the average emission rate of greenhouse gases relative to our ore mining and processing activity.

The increase in the intensity of greenhouse gas (GHG) emissions (+3%) is associated with the increase in fuel-intensive production processes production (+6%), mining (+6%), stripping (+25%) and underground development (+26%) in our newly launched mines, Svetloye, Komar and Kapan. However, there is a 6% reduction in GHG emissions intensity at our mature mines as a result of our energy and cost efficiency programme.