Capex – ca. RUB 25 bn
Alexey Philippovskiy, ALROSA’s CFO:
“Q1 saw a continued increase in demand for diamond jewelry from end consumers across all key markets, mainly in the US and China. In particular, the US market demonstrated a double-digits growth even against the 2019 results.
Thanks to strong demand and relatively low stocks in the cutting sector, diamond producers managed to significantly improve sales, while prices recovered to the early 2020 levels by the end of Q1’21.
ALROSA’s Q1 sales totalled 15.5 m cts, up 65% y-o-y and 47% more than in Q1'19, delivering robust financial results for the quarter, with RUB 91 bn in revenue and a 5% y-o-y growth in EBITDA which came at RUB 33.5 bn. Impressive sales volumes, which were more than twice as high as production, and a seasonal decrease in capex translated into a 2.4x growth in Free Cash Flow toRUB 52.7 bn, record-high for this period.
On the back of the strong free cash flow, the Company’s net debt turned negative to minus RUB 22 bn. As a result, ALROSA’s leverage (Net Debt / EBITDA) as at the end of Q1 totalled -0.2x (Q4’20: 0.4x).
The Company’s stable cash flow generation and material leverage improvement resulted in historically high half-year dividends – the recommended amount for H2’20 is RUB 70.3 bn, or RUB 9.54 per share. The dividend payment is to be discussed at the Annual General Meeting of Shareholders on 16 June 2021.
Our outlook for the end consumer market remains positive. The market is recovering faster than expected. Meanwhile, diamond supply is still 20% below the pre-COVID levels and the production is unlikely to bounce back in the mid-term.”