Will Polymetal International PLC Shares Outperform Glencore PLC, Anglo American plc, Rio Tinto plc And BHP Billiton plc Shares After Results?

Do shares in Polymetal International PLC (LON:POLY) (LSE:POLY.L) have greater investment appeal than shares in Glencore PLC (LON:GLEN) (LSE:GLEN.L), Anglo American plc (LON:AAL) (LSE:AAL.L), Rio Tinto plc (LON:RIO) (LSE:RIO.L) and BHP Billiton plc (LON:BLT) (LSE:BLT.L)?

Polymetal International PLC
Polymetal International PLC

Polymetal International PLC (LON:POLY) (LSE:POLY.L) shares have gained 0.65% after the release of 2016 results to the stock market. Polymetal’s share price may benefit in my opinion from an increase in revenue of 10% over 2015, totalling $1583 million. This was down to average realised gold and silver prices which were 8% and 11% higher respectively. Polymetal’s gold sales were 2% higher at 880 Koz and its silver sales were down 2% at 30.7 Moz.

Polymetal’s group total cash costs (TCC) were 6% higher than in 2015 at $570/gold equivalent ounce. This is in line with its original guidance. All-in sustaining cash costs (AISC) were 6% higher than in 2015 at $776/HE oz. They were mainly driven higher by an increase in TCC during the period and the appreciation of the Russian Rouble against the dollar in H2.

Adjusted EBITDA was $759 million, which is an increase of 15% year-on-year. This is on the back of higher commodity prices and stable production. Polymetal’s pre-acquisition FCF was $257 million, which is slightly higher than 2015’s $263 million. Net debt was broadly unchanged at $1330 million. Polymetal announced in today’s results that it intends to pay out 50% of underlying net earnings in future, which is higher than the previous 30% figure.

In the last year, Polymetal’s shares have lagged other mining stocks such as Glencore PLC (LON:GLEN) (LSE:GLEN.L), Anglo American plc (LON:AAL) (LSE:AAL.L), Rio Tinto plc (LON:RIO) (LSE:RIO.L) and BHP Billiton plc (LON:BLT) (LSE:BLT.L). Rio Tinto shares are 77% higher, BHP Billiton’s share price has gained 70%, Anglo American’s shares are 147% up and Glencore shares have increased 130%.

In my view, Polymetal has investment appeal in the long run. I’m optimistic about the gold price and think gold mining shares could perform well on a relative basis. I’m upbeat about the prospects for mining shares such as Rio Tinto, Glencore, BHP Billiton and Anglo American, but think Polymetal shares could perform well on a relative basis.







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