Petropavlovsk's debt pile damages profits

Petropavlovsk's growing debt pile and a larger-than-expected charge after investments in new mines dragged the Russian-focused producer's net profit down 90 per cent in the first half, sending its shares tumbling yesterday.

Petropavlovsk met operational targets. It will produce 700,000 ounces of gold this year. But its bottom line was battered by non-cash items, including a $106.9m (£67.7m) depreciation charge, up 132 per cent, and higher interest payments. Net profit fell to $11m. It has battled to counter market worries it will be unable to complete ambitious growth plans without endangering its ability to repay debt.

net debt has swelled to $1.1bn. The shares fell 16 per cent to 394p.