ALROSA Group’s Q3 and 9M 2020 IFRS results

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MDA Q3&9M 2020 Release
MDA Q3&9M 2020 Presentation
IFRS Q3&9M 2020 Consolidated statement
IFRS Q3&9M 2020 Consolidated statement_EXCEL

Moscow, 12 November 2020 – ALROSA, a global leader in diamond mining, announces its IFRS results for Q3 and 9M 2020.

RUB bn

Q3
2020

Q2
2020

q-o-q

Q3
2019

y-o-y


2020


2019

y-o-y

Diamond sales, m ct, incl.

5.0

0.6

6.4

(21%)

          15.1

25.3

(40%)

gem-quality

4.1

0.4

11х

4.3

(4%)

          11.5

18.2

(37%)

industrial

0.9

0.3

2.1

(57%)

            3.5

7.0

(50%)

Revenue

49.7

10.4

45.7

9%

        122.9

173.6

(29%)

EBITDA

25.7

0.1

220х

21.1

22%

55.8

77.5

(28%)

EBITDA margin

52%

1%

51 pp

46%

6 pp

45%

45%

Net profit

7.6

0.3

25х

13.5

(44%)

          10.9

51.0

(79%)

Free cash flow2

22.6

(30.2)

-

2.5

          14.3

30.8

(54%)

Net debt3

107.0

100.6

6%

63.0

70%

        107.0

63.0

70%

Net debt / LTM EBITDA

1.25х

1.25х

                -

0.6x

               -

1.25х

0.6x

              -

Alexey Philippovskiy, ALROSA’s CFO:

“From mid-August we started to see the first signs of recovery in the diamond market followed by a stronger demand for our core products. This was due to two key factors. The first one is the maximum support for our long-term customers by allowing them to refrain from buying volumes under effective contracts, which helped them significantly reduce stocks at the midstream. The second one is recovery of end demand for jewelry as the key markets saw the restrictions lifted (in September demand in China and US grew 13% and 14% y-o-y, respectively) supported by fast-growing online sales.

However, it is definitely too early to speak of the full recovery. The markets still face uncertainty caused by the pandemic's impact on the global economy and subsequent developments. The key indicator for the diamond industry will be upcoming Christmas and Chinese New Year retail sales.

As part of the ongoing efforts to fend off COVID-19 and its impact, the Company continues to take all steps needed to ensure the safety of its people. These include maintaining remote work arrangements for the majority of the administrative staff, providing the personnel with PPE, mandatory two-week observation, three tests prior to the shift start, and many more.

From the operational viewpoint, we remain focused on boosting efficiency and reducing costs across the lines, while staying flexible when it comes to planning capacity utilisation rates. Given the accumulated stocks and sales expectations for certain diamond categories, the Company's Board was recommended to approve as the base case scenario 2021 production guidance of 28–30 m ct mainly underpinned by production cuts at Almazy Anabara and Severalmaz.

The demand recovery undoubtedly had a positive impact on ALROSA's Q3 financial results. Our revenue grew 5x q-o-q to RUB 49.7 bn, while EBITDA rose to RUB 26 bn and EBITDA margin reached 52%. Free cash flow increased to RUB 23 bn. With a Q3 positive cash flow supporting our strong liquidity position at $1.7 bn, on 3 November we fully repaid $494 m Eurobonds as planned. As a result, we reduced our total debt to $2.3 bn to date.”


1 EBITDA stands for the Group’s earnings or loss for the period adjusted for income tax expenses, financial income and expenses, share of net profit of associates and joint ventures, depreciation and amortisation, impairment and disposals of property, plant and equipment, gain or loss on disposal of joint ventures, revaluation of investments, and one-off items.

2FCF (free cash flow) is the operating cash flow calculated in accordance with the International Financial Reporting Standards (IFRS), net of capital expenditure (posted as Purchase of Property, Plant and Equipment on the consolidated IFRS statement of cash flows).

3Net debt is the amount of debt less cash and cash equivalents and bank deposits at each reporting date in accordance with the IFRS.

This page was last updated on 12 November 2020 at 11.07