On December 9, 2009 the Executive Board of ALROSA held its regular meeting under the chairmanship of the Company’s President Fyodor Andreev.
The Board reviewed the Company’s preliminary performance data for 2009. The mine production by the ALROSA Group is reported to amount to USD 2 244.1 m in terms of value. The ALROSA Group core product sales reached USD 2 187.2 m, of which rough diamond sales account for USD 2 127.2 m and polished diamond sales account for the remaining USD 60 m.
In 2009 ALROSA supplied USD 923.4 m worth of rough diamonds to Gokhran (Russia’s State Repository of Precious Metals and Gems), while the rest of goods were sold on the market.
In H1 2009 ALROSA suspended practically all sales on the market, reinstating its market presence only in Q3 2009.
The cost of sales of core products, works and services in 2009 is estimated at RUB 37 938.2. The net profit is expected at RUB 3 182.6 m.
Also the Board discussed tentative economic and financial targets for 2010. The mine production target for ALROSA Group is set at USD 2 314.4 m. The Company intends to attain the core product (i.e. rough and polished diamonds) sales for ALROSA Group of USD 3 302.3 m. The sales to Gokhran are planned at USD 872.1 m, with the rest of the goods to be sold on the market. The target for polished diamond sales is USD 124.9 m. The bulk of the goods, no less than 70% of the total available volume, will be distributed to large players on the market under long-term contracts with them.
In 2010 ALROSA intends to refinance its short-term debt through issuing long-term ruble and currency denominated corporate notes. The level of corporate borrowings by January 1, 2011 is planned at USD 3 284.5 m.
The Board discussed the position of the corporate management on reorganizing ALROSA into an open joint stock company. The Board confirmed that such reorganization would be in the best long-term interests of ALROSA shareholders, as it would serve to improve the Company’s investor attractiveness, reduce the overall level of debt and achieve greater managerial efficiency. The position of the Executive Board will be submitted for approval to the ALROSA Supervisory Board.
Also some issues concerning labour protection and industrial safety at the Company’s facilities, and ways of enhancing licensing efficiency were discussed.
Prior to the Executive Board meeting President of ALROSA Fyodor Andreev held a series of working meetings devoted to social and HR policies, implementation of the investment program, and the cost-benefit analysis of underground mine construction projects in Udachny and Aikhal, and development of a diamond mining project in the Arkhangelsk Region operated by OJSC Severalmaz.