Petropavlovsk Says It Will Do Everything It Can to Cap DebtThomas Biesheuvel
Petropavlovsk Plc, a miner of gold in Russia, said it will do everything possible to ensure that its current debt pile doesn’t increase.
“We’re doing our level best to conserve cash, we’re doing our level best to control costs,” Chairman Peter Hambro said in an interview today. “We will do everything in our power to make sure this is the top.”
Petropavlovsk reported net debt of $1.06 billion at the end of 2012, up from $787.3 million a year earlier. The company’s debt has weighed on the stock price, which has tumbled about 62 percent in the past 12 months. The gold miner forecast “substantial repayment” of the debt by 2019 as it increases gold production and IRC Ltd., an iron-ore miner it has a 40 percent stake in, increases output.
Petropavlovsk rose 1.4 percent to 223.1 pence by the close in London trading.
The company today posted a net loss of $159.7 million compared with a profit of $230.9 million a year earlier after taking a writedown of $197.9 million on its IRC stake. A decade-long takeover binge of more than $1.1 trillion by mining and steel companies has led to more than $60 billion in asset writedowns.
The company, which produced 710,400 ounces of gold last year, said sales rose 9 percent to $1.4 billion. Profit before the deduction of the writedowns was $98.8 million. The company is targeting gold output of 760,000 to 780,000 ounces this year.
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