Yuzhuralzoloto: EBITDA doubles on gold prices, but cash flow lags

On August 15, Yuzhuralzoloto released its results for the first half of 2026. Revenue grew 90.5% to RUB 148.8 billion, EBITDA rose 197.2% to RUB 67.2 billion, and net profit increased 110.4% to RUB 27.2 billion. This review examines what drove the growth, why operating cash flow lags profit, and how it affects the company's valuation.

Key takeaways

— EBITDA for the half-year nearly tripled on higher gold prices and a weaker ruble

— EBITDA margin expanded from 28.9% to 45.2% as revenue outpaced costs

— Net profit rose 110.4%, but operating cash flow for the last 12 months was only RUB 20.4 billion

— Net debt fell by RUB 14.7 billion over the half-year, with Net Debt/EBITDA LTM at 1.27

— Shares rose 21.3% on the release day, but valuation remains below its three-year average

— Return on equity reached 44.4% on high profit and moderate capital

Key figures, RUB bn

EBITDA for the half-year nearly tripled on higher gold prices and a weaker ruble

For the first half of 2026, Yuzhuralzoloto's EBITDA reached RUB 67.2 billion, up 197.2% year-on-year. The main driver was higher gold prices in ruble terms, which boosted revenue by 90.5% to RUB 148.8 billion.

A weaker ruble amplified the effect of global gold prices, as the company sells its output for export. As a result, half-year EBITDA almost matched the level of the entire 2025, highlighting the business's high sensitivity to price conditions.

EBITDA margin expanded from 28.9% to 45.2% as revenue outpaced costs

EBITDA margin for the first half of 2026 stood at 45.2% versus 28.9% a year earlier. The 16.3 percentage point expansion is explained by revenue growing faster than operating costs, a significant part of which is denominated in rubles and not tied to gold prices.

Margin expansion is the key factor behind EBITDA growing faster than revenue. While revenue rose 90.5%, EBITDA increased 197.2%, indicating high operating profitability at current gold prices.

Net profit rose 110.4%, but operating cash flow for the last 12 months was only RUB 20.4 billion

Net profit for the first half of 2026 rose 110.4% to RUB 27.2 billion, with net margin up from 16.6% to 18.3%. However, operating cash flow for the last 12 months was only RUB 20.4 billion – significantly below net profit for the same period (RUB 24.1 billion).

The gap between profit and cash flow may be due to working capital growth, particularly inventories and receivables, as well as tax payments. This is an important signal: high paper profit does not fully convert into cash, limiting capacity for dividends and debt reduction.

Net debt fell by RUB 14.7 billion over the half-year, with Net Debt/EBITDA LTM at 1.27

At the end of the first half of 2026, Yuzhuralzoloto's net debt stood at RUB 84.0 billion, down RUB 14.7 billion from the previous reporting date. Over the last 12 months, debt decreased by RUB 4.6 billion.

Net debt/EBITDA LTM stood at 1.27, a moderate level for a gold miner. Debt reduction occurred amid high profit but was constrained by limited operating cash flow.

Shares rose 21.3% on the release day, but valuation remains below its three-year average

On the release day, Yuzhuralzoloto shares rose 21.3%, and by August 17 they had gained another 9.5%. Market capitalization reached RUB 159.6 billion.

Despite the rise, EV/EBITDA LTM stands at 3.67, well below the three-year average (7.50). P/E LTM is 6.63. Thus, the market values the company at a discount to its own history, possibly reflecting concerns about gold price sustainability and weak cash flow.

Return on equity reached 44.4% on high profit and moderate capital

Return on equity (ROE) for the last 12 months was 44.4%. This is a very high figure, reflecting both significant net profit and a relatively small equity base.

High ROE supports investment appeal, but also indicates that the company operates with a high debt burden, increasing financial risks if gold prices fall.

Valuation on the latest reported figures

Bottom line

The first-half 2026 report showed impressive growth in financial results, driven by favorable gold prices and a weaker ruble. EBITDA doubled, margins expanded, and net profit more than doubled. However, operating cash flow significantly lags profit, raising questions about earnings quality and the company's ability to generate cash for shareholders. Valuation remains below its three-year average, which may be justified by risks related to gold price volatility and weak cash flow. The key question for holders is whether the company can convert paper profit into real cash in the coming periods.