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Seligdar PJSC (MOEX: SELG, hereafter Seligdar or Company), a Russian gold and tin producer, published the interim condensed consolidated financial statements prepared in accordance with the International Financial Reporting Standards for the nine months ended September 30, 2023.

·         Consolidated revenue of Seligdar PJSC increased by 80% year-on-year and comprised 37.2 billion Russian roubles.

·         Gold sales grew by 50% to 5,963 kg in the reporting period compared to 3,980 kg year earlier.

·         Bank adjusted EBITDA for 9M2023 improved by 65% year-on-year and amounted to 14.7 billion Russian roubles.

·         Net debt/ bank adjusted EBITDA ratio was 2.45x as of September 30, 2023.

Revenue and prices

Consolidated revenue of Seligdar PJSC comprised 37,152 million Russian roubles for 9M2023 compared to 20,694 million Russian roubles for the same period of the previous year.

Revenue from sales of gold produced by the Holding companies amounted to 24,942 million Russian roubles (excluding gold sales of Lunnoe JSC not recorded in the consolidated financial statements) having increased by 70% year-on-year. The growth was attributable to the increase in sales volume by 17% to 4,641 kg and rise in average realised gold price by 45% to 5,375 Russian roubles per gramme.

In 1H2023, Seligdar also sold gold purchased from third parties. 1,322 kg of gold was purchased and sold in January-June 2023, gross profit from the transactions amounted to 614 million Russian roubles with a 10% margin. These were one-off transactions; no further transactions took place in the third quarter.

Revenue from tin, tungsten and copper concentrates sales stood at the level of the same period of the previous year and comprised 4,555 million Russian roubles for 9M2023. The decline in the tin and copper global market prices heavily affected average realised concentrates prices but growth in production and sales volume offset the negative impact of the market environment.

Revenue from other sales, which was primarily received from ore mining and other services provided to Lunnoe JSC and from silver sales, increased by 4% and comprised 1,453 million Russian roubles in the reporting period.

Profit and margins

Gross margin was 28% in January-September 2023 and bank adjusted EBITDA margin was 40%, having decreased due to the third-party gold sales transactions, which provided additional growth in revenue and EBITDA but had lower margin. Excluding these one-off transactions effect, gross margin remained stable at 32%; and bank adjusted EBITDA rose to 46% compared to 43% year earlier. The bank adjusted EBITDA margin of the gold division (excluding the effect of one-off third-party gold sales transactions) was 49% for 9M2023 compared to 47% year earlier. The bank adjusted EBITDA of the tin division declined from 30% to 25% amid lower tin and copper market prices.

Bank adjusted EBITDA calculated before mineral extraction tax and non-cash change in inventory provision comprised 14,744 million Russian roubles in January-September 2023 having increased 1.7-fold compared to the same period of the previous year.

Loss of 8,961 million Russian roubles was reported for 9M2023; it was mostly attributable to the non-cash foreign exchange loss from revaluation of gold-nominated loans amid the rise in the gold market price in US dollars and Russian rouble depreciation. Profit net of foreign exchange loss amounted to 3,537 million Russian roubles in January-September 2023 compared to 696 million Russian roubles loss year earlier.

Debt

Financial debt of Seligdar PJSC (loans and borrowings and financial lease) comprised 56,891 million Russian roubles as of September 30, 2023. Net debt (excluding cash and market value of unrealised refined gold as of September 30, 2023) totalled 47,252 million Russian roubles. Net debt/ bank adjusted EBITDA ratio was 2.45x at the end of the reporting period.

Key financials, million Russian roubles