Petropavlovsk wins over analysts with refinancing results
Gold miner Petropavlovsk narrowed its losses to $348m (£226m) in 2014, compared to a $713m loss in 2013, and several analysts yesterday upgraded their ratings on the company.
Petropavlovsk chairman Peter Hambro told City PM that 2014 was “a year in which we rebuilt the platform and the year in which we put behind us the uncertainty that so bedevilled the market”.
Commenting on the company’s debt refinancing plan, which completed in March, Hambro said: “It gives us a chance to demonstrate that we have a sound new platform for the next five years.”
The company is hoping to reduce its net debt to below $600m by the end of this year, from $707m at the end of March. The firm’s debt stood at around $900m before the refinancing was announced.
Analysts at Canaccord Genuity said the 2014 financial results “do not reflect the impact of the financial restructuring of the group”, while Bank of America Merrill Lynch (BAML) analysts said the company’s “balance sheet/liquidity problem is now largely fixed”. According to BAML, it sees “a path to deleveraging and geared returns to equity as a result”.
Meanwhile, the mining team at Numis said the results for 2014 showed “some real improvement”. “Sustainability will be key but the balance sheet improvement is a plus,” they added, before warning that there is “still a mountain to climb to remove the debt overhang”.
Hambro would not give an exact timeline for the company to deal with the remaining debt, but said: “Mountains are relative – if you are an ant, a molehill is a mountain.”
Shares in the group closed up by 0.17 per cent yesterday.