Alrosa's Net Profit for 1st Quarter Came Down by 87%

Moscow: ALROSA’s net profit for the 1st quarter of 2020 under IFRS amounted to 3 billion rubles, which is a 74% drop from 11.7 billion rubles compared to the previous quarter and fall of 87% compared to last year due to non-cash factors (foreign exchange loss of RUB 21 bn resulting from the revaluation of foreign currency debt).

Revenue in Q1 was RUB 63 bn (-3% q-o-q) amid a 14% decline in the average realised price, and decrease in other revenue and income from grants.

On a y-o-y basis, revenue decreased by 11% as a result of lower sales volumes (down 11% y-o-y) caused by COVID-19 and price index reduction.

EBITDA increased to RUB 30 bn (up 2% q-o-q) mainly due to seasonal reduction in social and SG&A expenses. A 4% y-o-y reduction resulted primarily from lower sales volumes (down 11%).

EBITDA margin expanded to 48% (up 2 pp q-o-q and up 4 pp y-o-y) on the backdrop of lower costs.

Free cash flow (FCF) in Q1 went up by 30% q-o-q to RUB 22 bn amid a stronger operating cash flow (up RUB 0.7 bn) and a seasonal reduction in CAPEX (down RUB 4.3 bn).

A 16% y-o-y decline was mostly driven by a RUB 5.2 bn decrease in the operating cash flow partially offset by a RUB 1.2 bn reduction in CAPEX.
ALROSA also released a revised production plan, which was reduced to 28-31 million carats (previously 34 million carats).

In addition, the company cut CAPEX from RUB 22 bn to RUB 20 bn.