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.
In Q3, revenue increased 5x q-o-q to
RUB 49.7 bn (up 9% y-o-y) due to demand recovery
following a significant drop in diamond supply in Q2 amid the
pandemic.
EBITDA1
in Q3 reached RUB 25.7 bn (vs Q2’20: RUB 117 m)
on the back of sales rebound and cost control initiatives, while
also increasing by 22% compared to Q3 2019.
EBITDA margin in Q3 expanded to 52%
(Q3’19: 46%).
Net profit in Q3 grew to RUB 7.6 bn
driven by a top line growth despite a negative impact from the FX
rate (- RUB 10 bn).
Free cash flow (FCF) in Q3 grew to
RUB 22.6 bn compared to a negative FCF of RUB 30 bn
in Q2 (up RUB 20.1 bn y-o-y) due to an increase in
operating cash flow to RUB 28 bn. Capex was RUB 5.4
bn (up 19% q-o-q, up 16% y-o-y).
Net debt / LTM EBITDA as at
the end of Q3 remained flat at 1.25x.
2020 outlook:
Production – 30 m ct (vs early
2020 guidance of 34 m ct);
Capex – ca. RUB 20 bn (vs
the previous guidance of RUB 22 bn).
RUB bn
|
Q3
2020
|
Q2
2020
|
q-o-q
|
Q3
2019
|
y-o-y
|
9Ì
2020
|
9Ì
2019
|
y-o-y
|
Diamond sales, m ct, incl.
|
5.0
|
0.6
|
8õ
|
6.4
|
(21%)
|
15.1
|
25.3
|
(40%)
|
gem-quality
|
4.1
|
0.4
|
11õ
|
4.3
|
(4%)
|
11.5
|
18.2
|
(37%)
|
industrial
|
0.9
|
0.3
|
3õ
|
2.1
|
(57%)
|
3.5
|
7.0
|
(50%)
|
Revenue
|
49.7
|
10.4
|
5õ
|
45.7
|
9%
|
122.9
|
173.6
|
(29%)
|
EBITDA
|
25.7
|
0.1
|
220õ
|
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
|
25õ
|
13.5
|
(44%)
|
10.9
|
51.0
|
(79%)
|
Free cash flow2
|
22.6
|
(30.2)
|
-
|
2.5
|
9õ
|
14.3
|
30.8
|
(54%)
|
Net debt3
|
107.0
|
100.6
|
6%
|
63.0
|
70%
|
107.0
|
63.0
|
70%
|
Net debt / LTM EBITDA
|
1.25õ
|
1.25õ
|
-
|
0.6x
|
-
|
1.25õ
|
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.
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