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ALROSA Q1 2019 revenue grows 15% over previous quarter, still down 21% year-on-year

ALROSA today reported its IFRS financial results for the quarter ending March 31, 2019 (Q1), stating that revenue increased 15% over the previous quarter to RUB 70 billion, but was still 21% lower than the revenue of RUB 96 billion earned in the comparative quarter a year earlier.

The Company said that sales volumes of 10.6 mn carats too reflected a similar pattern, registering an 18% increase q-o-q, but a 21% decline when compared to the same period of 2018.

EBITDA grew by 16% q-o-q to RUB 31 bn, supported by top line growth, ALROSA said. On a y o y basis, EBITDA decreased by 34% as revenue declined.

Similarly, net profit grew 3x q-o-q to RUB 24 bn because of, among other things, the low base of the Q4 2018 net profit (due to one-off factors, including impairment) and the growth in EBITDA. A 27% y-o-y decline was attributable to lower revenue.

Alexey Philippovskiy, ALROSA’s Deputy CEO, commented on the results: “Following a sizable destocking of small-size rough diamonds by cutters and polishers in 2H 2018, we saw an improved demand for this product early in 2019. This translated in a 18% q-o-q sales growth in Q1, which came at 10.6 m carats; Q1 revenue increased by 15% q o q to RUB 70.5 bn. Better operating performance coupled with continuous cost control helped us maintain EBITDA margin at 44%. In absolute terms, EBITDA grew by RUB 4.5 bn to RUB 31.4 bn.”

He added that free cash flow grew to an impressive RUB 25.9 bn (up 81% q-o-q) on the back of capex reduction by 45% q-o-q (-20% y-o-y) to RUB 3.9 bn and RUB 3.6 bn of working capital release, mainly due to a seasonal decline in rough diamond inventories. As a result, the Company’s leverage slimmed down, with the net debt / EBITDA ratio now standing at 0.2x.

Courtesy - GJEPC

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