ALROSA MDA Q2&6M 2021 Release
MDA Q2&6M 2021 Presentation
IFRS Q2&6M 2021 Consolidated statement
IFRS Q2&6M 2021 Consolidated statement_EXCEL
Moscow, 13 August 2021 - ALROSA, a global leader in diamond mining, announces its IFRS results for Q2 and 6M 2021.
- Revenue in Q2 increased by 3% qoq to RUB 94 bn driven by a recovery in like-for-like rough diamond prices (+7%) and a better sales mix, as well as by robust sales of polished diamonds, including the unique Spectacle diamond. A 9x growth on yoy basis was due to the low base of Q2 2020 (0.6 m ct vs 11.4 m ct in Q2 2021). 6М revenue increased 2.5x to RUB 184 bn, mainly due to a 2.7x growth in sales volumes.
- EBITDA gained 36% qoq reaching RUB 46 bn, driven by higher average realised prices. 6M EBITDA went up 2.6x to RUB 79 bn.
- Q2 EBITDA marginexpanded by 12 pp qoq to 49% (Q2'20: 1%).
- Net profit climbed 26% qoq to RUB 30.2 bn on stronger return on sales. An increase in sales was behind 6M net profit reaching RUB 54.2 bnduring 6M (6M'20: RUB 3.3 bn).
- Free cash flow (FCF) in Q2 stood at RUB 12 bn,down RUB 41 bn qoq (but up by RUB 42 bn yoy) due to higher working capital on the back of normalisation of advances from customers (see page 9). 6M FCF expanded to RUB 64.7 bn (+RUB 73 bn yoy).
- Capex sequentially grew to RUB 4.5 bn due to seasonality (-1% yoy).
- Net debt / LTM EBITDA as at the end of Q2 remained negative at minus 0.2x.
- 2021 outlook:
- Production - 31.5 m ct, with a 5% growth potential;
- Capex - ca. RUB 21 bn (vs the previous guidance of RUB 25 bn), reduction due to the postponed payments.
RUB bn |
Q2 |
Q1 | qoq |
Q2 | yoy |
6М |
6М | yoy |
Diamond sales, m ct, incl. | 11.4 | 15.5 | (26%) | 0.6 | 18x | 27.0 | 10.1 | 2.7x |
gem-quality | 7.5 | 9.7 | (23%) | 0.4 | 20.7x | 17.2 | 7.4 | 2.3x |
industrial | 4.0 | 5.8 | (31%) | 0.3 | 14.6x | 9.8 | 2.6 | 3.7x |
Revenue | 93.5 | 90.8 | 3% | 10.4 | 9x | 184.4 | 73.1 | 2.5x |
EBITDA | 45.5 | 33.5 | 36% | 0.1 | 389.3x | 79.0 | 30.1 | 2.6x |
EBITDA margin | 49% | 37% | 12 pp | 1% | 48 pp | 43% | 41% | 2 pp |
Net profit | 30.2 | 24.0 | 26% | 0.3 | 114.7x | 54.2 | 3.3 | 16.3x |
Free cash flow1 | 12.0 | 52.7 | (77%) | (30.2) | - | 64.7 | (8.3) | - |
Net debt2 | (29.9) | (21.7) | 38% | 100.6 | - | (29.9) | 100.6 | - |
Net debt / LTM EBITDA | (0.2x) | (0.2x) | - | 1.2х | - | (0.2x) | 1.2х | - |
Alexey Philippovskiy, ALROSA's CFO:
'Q2 saw a continued increase in demand for diamond jewelry, with the US and China (including Hong Kong) growing at an average of 35% and 15% respectively compared to 2019. Heading into the second half of the year, retailers note continued optimism among consumers and their increased interest in diamond jewelry.
Buttressed by the stronger demand, there were an increase in diamond sales and a progressive recovery in prices. ALROSA sold 11.4 m ct in Q2 - 38% more than in 2019, and the price index climbed 16% within 6M 2021. Strong operating results translated into further growth of our top line reaching RUB 94 bn and profitability expansion to 49%. EBITDA grew by 36% qoq to RUB 45.5 bn. The impressive sales growth vs Q2 2020 allowed us to achieve a free cash flow of RUB 12 bn for the quarter and almost RUB 65 bn for the first half of 2021.
On the back of the strong free cash flow for 6M, the Company's net debt as at the end of Q2 stood at minus RUB 30 bn, while ALROSA's leverage (Net Debt / EBITDA) remained at minus 0.2x. The Company's strong credit quality, unique business model, and leading position on the diamond market were acknowledged by rating agencies, with Fitch upgrading ALROSA's long-term credit rating to BBB (outlook stable) in June, and S&P in July raising the stand-alone credit profile (SACP) of the Company to above the sovereign (BBB), making us one of the only three companies in Russia with such a rating.
The Company's stable cash flow generation and material leverage improvement resulted in historically high interim dividends for H2 2020 of RUB 70.3 bn, or RUB 9.54 per share. Dividend payout for H1 2021 to be recommended by the Supervisory Board at the end of August and to be approved by the end of September.
Our outlook for the end consumer market remains positive. The market is recovering faster than we predicted. Meanwhile, diamond supply is still 20% below the pre-COVID-19 levels, and the global production is unlikely to bounce back in the midterm.'
1FCF (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).
2Net 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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ALROSA PJSC published this content on 13 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 August 2021 08:10:04 UTC.
