ALROSA Q4 and 12M 2019 IFRS results

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MDA 12M 2019 Release
MDA 12M 2019 Presentation
IFRS 12M 2019 Consolidated statement
IFRS 12M 2019 Consolidated statement_EXCEL

Moscow, 10 March 2020 – ALROSA, the world’s leader in diamond mining, announces its IFRS financial results for Q4 2019 and FY 2019.

RUB bn

Q4
2019

Q3
2019

q-o-q

Q4
2018

y-o-y

12М
2019

12М
2018

y-o-y

Diamond sales, m ct, incl.

8.2

6.4

28%

9.0

(9%)

33.4

38.1

(12%)

gem-quality

5.9

4.3

38%

5.3

13%

24.2

26.4

(8%)

industrial

2.2

2.1

9%

3.7

(40%)

9.3

11.7

(21%)

Revenue

64.6

45.7

41%

61.4

5%

238.2

299.6

(21%)

EBITDA

29.5

21.1

40%

26.9

10%

107.1

156.0

(31%)

EBITDA margin

46%

46%

(0.3 pp)

44%

2%

45%

52%

(7 pp)

Net profit

11.7

13.6

(14%)

7.9

47%

62.7

90.4

(31%)

Free cash flow2

16.8

2.5

572%

14.3

18%

47.6

92.3

(48%)

Net debt3

79.6

63.0

26%

67.4

18%

79.6

67.4

18%

Net debt / LTM EBITDA

0.7x

0.6x

0.4x

               –

0.7x

0.4x

              –

Alexey Philippovskiy, ALROSA’s CFO, commented on the results:

“In the first half of 2019, the diamond market was impacted by the excessive supply of polished diamonds and a decreased availability of funding for the Indian midstream segment. Diamond producers were able to adjust their sales policy by reducing supply by 20%, helping to improve the balance of demand and supply across the chain as early as by the end of 2019.  Starting from the middle of the year, the market saw prices and demand stabilisation, with monthly sales demonstrating a positive trend in August - December. In the second half of 2019, consumer activity recovered across key sales markets, above all in the US.

Still, the overall weakening of demand for diamonds in 2019 caused the diamond price index to go down by 6% vs 2018. 2019 was marked by stronger demand for small-size diamonds, reflected in a 16% reduction in average realised prices.

In 1H 2020, jewellery demand will be impacted by exogenous factors. At the same time, the diamond industry looks much healthier in 2020, with balanced stocks, both for jewellery in retail, and for cutters’ diamonds, and with the mid-stream leverage back to historical levels

ALROSA’s financials in 2019 saw expected pressure from external factors. Sales went down by 12% y-o-y to 33.4 m carats. 2019 revenue decreased by 26% to $3,273 m. In Q4, revenue picked up by 48% y-o-y to $888 m amid improved demand and destocking in the midstream and retail.

Total debt for 2019 increased by 23% to $1.9 bn.

2019 FCF stood at RUB 48 bn (down by 48%), with capex declining by 28% to RUB 20 bn. In Q4, FCF was up 6.7x q-o-q and reached RUB 16.8 bn despite seasonal capex growth (up 49% q-o-q).

Net debt / EBITDA as at the end of Q4 2019 stood at 0.7x, in line with the target leverage and higher than in Q3 2019, which is mainly explained by a 1H 2019 dividend cash payment of RUB 27.7 bn”.

 


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 10 March 2020 at 10.08