Gold prices drive Polyus to record EBITDA despite sanctions pressure
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Polyus (PLZL), Russia’s largest gold producer, reported record financial results for 2024, driven by soaring gold prices and increased sales volumes. Gold has climbed 11% year-to-date, reaching $2,918.99 per ounce, following a 27% surge in 2024—the metal’s strongest performance in over a decade. Despite Western sanctions restricting access to global markets, Polyus capitalized on the favorable pricing environment to boost revenue and profitability.
Gold Market Impact on Financial Performance
EBITDA: Increased 49% YoY to $5.7 billion, reflecting strong gold price tailwinds.
Revenue: Climbed to $7.3 billion, driven by higher gold sales and pricing.
Net Income: Surged 86% YoY to $3.2 billion, benefiting from premium pricing and operational efficiency.
Gold Production & Sales Trends
2024 Production: Output rose 7% to 3 million ounces, exceeding guidance.
Sales Volume: Increased 11% to 3.1 million ounces, capitalizing on heightened investor demand for gold as a safe-haven asset.
Market Position: Russia remains the world’s second-largest gold producer, accounting for 9% of global output in 2023.
Sanctions & Cost Pressures in Gold Mining
While gold prices provided significant revenue upside, Polyus continues to face operational hurdles due to Western sanctions, which have cut access to key mining equipment and financing. As a result, the development cost of its flagship Sukhoi Log gold deposit in Siberia has nearly doubled to $6 billion. The company has pivoted to alternative suppliers, primarily from China, to sustain its operations and long-term project pipeline.
2025 Outlook & Gold Market Implications
Production Guidance: Expected to decline to 2.5-2.6 million ounces, partially due to increased capital commitments for future expansion.
Capital Expenditure: Set to rise to $2.2-$2.5 billion, significantly higher than $1.26 billion in 2024, reflecting ongoing investments in Sukhoi Log.
Dividend Policy: Polyus confirmed a semi-annual dividend payout, targeting 30% of EBITDA, with a Q4 dividend decision scheduled for March 10.
Gold Price & Investment Trends
As global economic uncertainty persists, gold remains a key hedge against inflation and geopolitical risk, supporting elevated prices. With institutional demand rising and central bank purchases hitting record levels, Polyus is positioned to benefit from sustained high gold prices, despite regulatory challenges. Investors will closely monitor gold’s trajectory and its influence on mining profitability in 2025.
Gold Market Impact on Financial Performance
EBITDA: Increased 49% YoY to $5.7 billion, reflecting strong gold price tailwinds.
Revenue: Climbed to $7.3 billion, driven by higher gold sales and pricing.
Net Income: Surged 86% YoY to $3.2 billion, benefiting from premium pricing and operational efficiency.
Gold Production & Sales Trends
2024 Production: Output rose 7% to 3 million ounces, exceeding guidance.
Sales Volume: Increased 11% to 3.1 million ounces, capitalizing on heightened investor demand for gold as a safe-haven asset.
Market Position: Russia remains the world’s second-largest gold producer, accounting for 9% of global output in 2023.
Sanctions & Cost Pressures in Gold Mining
While gold prices provided significant revenue upside, Polyus continues to face operational hurdles due to Western sanctions, which have cut access to key mining equipment and financing. As a result, the development cost of its flagship Sukhoi Log gold deposit in Siberia has nearly doubled to $6 billion. The company has pivoted to alternative suppliers, primarily from China, to sustain its operations and long-term project pipeline.
2025 Outlook & Gold Market Implications
Production Guidance: Expected to decline to 2.5-2.6 million ounces, partially due to increased capital commitments for future expansion.
Capital Expenditure: Set to rise to $2.2-$2.5 billion, significantly higher than $1.26 billion in 2024, reflecting ongoing investments in Sukhoi Log.
Dividend Policy: Polyus confirmed a semi-annual dividend payout, targeting 30% of EBITDA, with a Q4 dividend decision scheduled for March 10.
Gold Price & Investment Trends
As global economic uncertainty persists, gold remains a key hedge against inflation and geopolitical risk, supporting elevated prices. With institutional demand rising and central bank purchases hitting record levels, Polyus is positioned to benefit from sustained high gold prices, despite regulatory challenges. Investors will closely monitor gold’s trajectory and its influence on mining profitability in 2025.