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. Last Updated: 07/27/2016

Polyus Full-Year Profit Plummets 96%

Polyus Gold, the country's biggest producer of the metal, said Monday that full-year profit fell 96 percent after a gain in the prior year from the sale of 20 percent in Gold Fields, the second-largest African gold producer.

Net income dropped to $41.1 million from $1.16 billion, the company said in a statement. Profit surged more than 10-fold in 2006 after the company gained $980 million from the sale of its Gold Fields stake.

"The 2007 results were totally in line with expectation, which is to say, weak," Mikhail Stiskin, a metals analyst with Troika Dialog, wrote in an e-mail.

Polyus declined 12.89 rubles, or 0.9 percent, to 1,470.32 rubles at the close on the MICEX exchange, valuing the company at 280.2 billion rubles ($11.9 billion).

The average gold selling price grew 17 percent to $706.5 per ounce in 2007, while costs of metal sales rose 20 percent and output was little changed at 1.21 million ounces. The cost of sales and administration more than tripled to $262 million as management exercised share options, it said.

Five Polyus managers and directors, including some no longer employed by the company, exercised options to buy almost 4.6 million shares, the gold miner said Sept. 14. The options cost the company $133 million, Polyus said Monday.

Operating profit fell 75 percent to $54 million.

Billionaire investors Mikhail Prokhorov and Vladimir Potanin have spent more than a year trying to divide up their jointly held assets, including Polyus and Norilsk Nickel. Prokhorov's Onexim Holdings offered to buy 12.5 million shares, or 6.5 percent of the company, from Polyus unit Jenington International, Polyus said May 30.