Департамент торговых идей

2018 operating results of KazAtomProm indicate a decrease in the level of production (attributable) by 5% yoy, which was expected. At the same time, uranium sales increased by 64% compared with the level of 2017 and reaching 16.6ths tons.

Inflation rate slowed in January 0.5% (0.7% in December), annualized rate declined to 5.2% (5.3% in 2017). The main contribution to price increase provided groceries while slight increase for non-food was offset by the decline in services tariffs.

Chevron on Friday announced preliminary results for 2018.

At the end of 2018 Chevron revenues grew by 17% to $166bn, reflecting an increase in average daily production of more than 7% to a 2.93mn boepd. Chevron expects further production growth of 4-7% per year, which corresponds to an increase in net proven reserves of ~ 1.5bn boepd.

According to 2018 production results, the Company produced 1,562mln oz of gold equivalent (+9% y/y), including 1,198mln of gold (+9% y/y), 25,7mln oz of silver (-3% y/y), 3,3ktons of copper (+27% y/y) and 5,6ktons of zinc (+19% y/y). The Company’s revenue increased by 4% y/y and amounted to USD1 882mln. The major increase in production was attributable to Svetloye plant with the production amounting to 136 koz of gold equivalent (+28% y/y), Albazino-Amursk and Varvara hub, where the production reached 308koz of gold equivalent (+14% y/y) and 142koz of gold equivalent (+9% y/y), equivalently.

Yesterday Centerra Gold announced that, at the request of the Government of the Kyrgyz Republic, it has agreed to further extend the First Longstop Date by which all conditions precedent to the completion of the Strategic Agreement with the Kyrgyz Republic are required to be satisfied from January 31,2019 to May 31,2019.

Nostrum yesterday reported its operating results for 2018. The average daily production amounted to 31.3ths boepd, decreasing by 20% yoy. As a result, the company expects revenue for 2018 at a level above $389mn (2017 - $405mn).

According to the production results, the Company produced 294,7 kt of copper, which is 14% y/y higher than the previous year’s production results (2017:258,5 kt of copper) and corresponds to the upper limit of the planned annual range of 270-300 kt. Positive production results of Aktogay positively affected the Company’s growth for the copper production. Company has increased its gold production by 3% y/y, which amounted to 183,4 koz, and turned out to be higher than the planned annual range of 160-175 koz. The Company has produced 3 511 koz of silver (+0,14% y/y), which exceeded annual target level of 3 000 koz. The annual production of the zinc concentrate equaled to 49,7 kt (-14% y/y) due to the lower than expected zinc grades.

KTO reported a decrease in 2018 oil transportation on a separate basis by 2% yoy to 45.3mn tons. Separately, cargo turnover of crude oil by KTO also showed a decrease of 4% yoy, reaching 38,040mn tons/km. Consolidated cargo turnover amounted to 46,120mn tons/km, which is 5% lower than in 2017.

22 January 2019 Kaz Minerals announced that the initial completion of the transaction to acquire the Baimskaya copper project has occurred following the regulatory approval and completion of other conditions precedent under the agreement was announced by the Group on 2 August 2018.

Since our last review of Polymetal, the Company's shares have increased by 27% due to the positive dynamics of gold prices in the second half of 2018, the volatility of the stock market, the slowdown in the rate of increase in yields of US government bonds and the aggravation of trade relations between the United States and China. Emphasizing the positive trend in gold prices, the forecast increase in gold equivalent production and attractive dividend payments, on the one hand, and growth in operating costs, on the other hand, we do not expect further rapid growth in the long term. We downgrade our recommendation from Buy to Hold Polymetal shares and raise our 12M target price from 735 GBp/share to 860 GBp/share.