UPDATE 1-Russian gold miner Polyus swings to H1 profit

Russia's largest gold miner, swung to a net profit of $132.8 million in the first half of 2008 as higher production and prices reversed a restated $75.5 million loss in the same year-earlier period.

Polyus said in a statement first-half 2008 revenue rose 63.5 percent year-on-year to $505.7 million.

"The positive revenue dynamics resulted from significant growth in gold output of 18.9 percent, as well as from favourable market conditions," Polyus said in the statement.

Polyus, whose main shareholders are Russian billionaires Mikhail Prokhorov and Vladimir Potanin, produced 559,000 ounces of gold in the first half of 2008, compared with 470,000 ounces a year earlier, and sold all of the gold it produced.

World gold prices increased by 9.9 percent to $930.25 per ounce on June 30 from $846.75 on Jan. 2, Polyus said. The weighted average gold price rose to $908.7 per ounce in the first half of 2008 from $659.7 in January-June 2007.

Polyus said it sold the metal exclusively on the domestic market in the first six months of this year.

"The decision not to continue working under export contracts was made based on the more attractive conditions of contracts with Russian banks," the company said.