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MOSCOW, March 15 (Reuters) - Russian gold and silver producer Polymetal’s net earnings rose 79 percent to $395 million in 2016 due to higher prices for precious metals and foreign exchange gains on a stronger rouble.
The company, part-owned by businessman Alexander Nesis, also recommended a final dividend of $0.18 per share, bringing the dividend for 2016 to $179 million, and revised its dividend policy, increasing the amount of underlying net earnings to be spent on dividend to 50 percent from 30 percent.
The new policy will become effective from the 2017 interim dividend. Polymetal’s underlying net earnings rose 31 percent to $382 million in 2016.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) rose 15 percent to $759 million in 2016 with revenue up 10 percent to $1.6 billion, Polymetal said in a statement.
The company also reconfirmed its production guidance for 2017 and 2018 of 1.40 million troy ounces and 1.55 million ounces of gold equivalent, respectively. It produced 1.27 million ounces of gold equivalent, which is a mix of gold and other metals, in 2016.
Its 2017 total cash costs are expected to rise 10 percent to $600-650 per ounce of gold equivalent due to higher domestic diesel prices and a stronger rouble.
According to the revised dividend policy, Polymetal’s regular dividend will be subject to a hard ceiling of net debt to adjusted EBITDA ratio below 2.5.
The ratio, a measurement of leverage which shows how many years it may take a company to pay back its debt, was at 1.75 at the end of 2016, the company said. (Reporting by Diana Asonova and Polina Devitt; writing by Polina Devitt; editing by Susan Thomas)