Revenue increased by almost 40% compared to the same period last year and reached RUB 28 billion, mainly due to the favorable market situation for gold miners. However, the operating profit remained extremely low — only about 14 million rubles, demonstrating the inefficiency of the company's operating model.
Free cash flow (FCF) is also a concern, as it amounted to minus 18 billion rubles. Compared to the positive value of the previous year (4 billion rubles) The indicator deteriorated significantly due to the high volume of investments in fixed assets (Capex) and the growth of interest payments. Even a hypothetical recovery in working capital management efficiency in the second half of the year is unlikely to allow us to reach positive FCF values for the full fiscal year. In the 1 year since 09/08/2024, shares have fallen in price by 8.82%
We note an increase in net debt to the critical Net Debt/EBITDA level of 4, which poses significant risks to financial stability. In the first half of the year, the company was forced to raise additional borrowed funds in the amount of about 17 billion rubles, increasing the total debt to an impressive 106 billion rubles. Additionally, doubts arise about the quality of assets, including the issuance of large loans to affiliated structures ("Coniferous", "Lunar") in the amount of about 4 billion rubles.
At the same time, the volume of cash decreased from 8 to 2 billion rubles, practically depriving the company of the opportunity to pay dividends to shareholders even with the positive dynamics of the raw materials market.
Despite the decrease in net loss from 4.7 billion to 0.8 billion rubles, the final financial situation looks unfavorable due to the high risks of credit burden and litigation. The financial situation requires serious improvement of management approaches and solutions, otherwise the company's development prospects will remain uncertain.
SELG)
