ALROSA MDA Q4&12M 2021 Release
MDA Q4&12M 2021 Presentation
IFRS Q4&12M 2021 Consolidated statement
IFRS Q4&12M 2021 Consolidated statement_EXCEL
Moscow, 02 March 2022 - ALROSA, a global leader in diamond mining, announces its IFRS results for Q4 and 12M 2021.
- Revenue in Q4 amounted to RUB 71 bn, down 8% qoq due to change in the sales mix. This was partially offset by a higher price index (+6% qoq) and a rise in sales volumes (+3% qoq). A 28% yoy drop came as a result of lower rough diamond sales against the high base of Q4 2020 (17 m ct sold, incl. 9.9 m ct from inventories), which was partially offset by a higher price index (+32% yoy) and sales mix improvements.
In 12M, revenue grew by 50%to RUB 332 bn on the back of a 42% increase in total rough diamond sales and the gem diamonds price index gaining 13%.
- Q4 EBITDA was RUB 26 bn, down 25% qoq (-19% yoy) mainly due to lower revenue per carat ($124/ct, down $12/ct qoq). 12M EBITDA rose by 59% to RUB 139 bn supported by higher sales and prices.
- EBITDA margin stood at 37% in Q4, and 42% in 12M.
- Q4 net profit amounted to RUB 12 bn, down 51% qoq primarily due to lower profitability.
In 12М,net profit went up 2.8x to RUB 91 bn (12M 2020: RUB 32 bn).
- Q4 free cash flow (FCF) stood at RUB 17 bn (down 32% qoq and 74% yoy) resulting from weaker profitability and higher capex.
2H 2021 FCF amounted to RUB 41 bn and in 12M it expanded to RUB 106 bn (12M 2020: RUB 79 bn).
- Capex in Q4 reached RUB 6.7 bn.
For 12M, capex amounted to RUB 19 bn (12M 2020: RUB 17 bn).
- Net debt / LTM EBITDA as at the end of Q4 was at 0.4x.
- 2022 outlook:
- Production (baseline scenario) - 34.3 m ct;
- Capex - ca. RUB 33 bn.
RUB bn |
Q4 |
Q3 | qoq |
Q4 | yoy |
12М |
12М | yoy |
Diamond sales, m ct, incl. | 9.4 | 9.2 | 3% | 17.0 | (45%) | 45.5 | 32.1 | 42% |
gem-quality | 6.7 | 6.5 | 2% | 12.2 | (46%) | 30.4 | 23.8 | 28% |
industrial | 2.8 | 2.6 | 4% | 4.8 | (42%) | 15.2 | 8.3 | 83% |
Revenue | 70.7 | 76.9 | (8%) | 98.6 | (28%) | 332.0 | 221.5 | 50% |
EBITDA | 25.8 | 34.6 | (25%) | 31.8 | (19%) | 139.5 | 87.6 | 59% |
EBITDA margin | 37% | 45% | (8 p.p.) | 32% | 5 p.p. | 42% | 40% | 2 p.p. |
Net profit | 12.1 | 25.0 | (51%) | 21.3 | (43%) | 91.3 | 32.2 | 2.8x |
FCF[1] | 16.7 | 24.5 | (32%) | 65.2 | (74%) | 105.9 | 79.5 | 33% |
Net debt[2] | 61.2 | 8.9 | 6.9x | 31.2 | 96% | 61.2 | 31.2 | 96% |
Net debt / LTM EBITDA | 0.4x | 0.1x | - | 0.4x | - | 0.4x | 0.4x | - |
Alexey Philippovskiy, ALROSA's CFO:
"Q4 demand for jewelry continued to grow by double digits. In 2021, sales of diamond jewelry hit a new record of $84 bn[3], 10% above the previous records of 2018-2019.
Sales of rough diamonds reached 138 m ct worldwide, with production totalling 115 m ct. In 1H 2021, the stocks accumulated previously helped meet the demand. Starting from Q3 2021, mining companies have exhausted their inventories and now supply freshly produced rough diamonds. According to preliminary estimates, global diamond production will remain at 110-120 m ct in the coming years.
The Company's performance in 2021 was mainly supported by conducive external environment:
- ALROSA's 12M sales saw a 1.4x increase up to record-high 45.5 m ct, including 1.4 m ct purchased at Gokhran's auctions in 2021.
- High demand and limited supply drove a 13% yoy and 6 qoq growth in average price index in 12M and in Q4 2021, respectively, with January-December 2021 delivering a 33% increase.
- 12M 2021 revenue amounted to RUB 332 bn (+50%). Q4 revenue stood at RUB 71 bn, down 28% yoy primarily due to the high base of Q4 2020, when sales notched up 17 m ct, with more than a half of the sales late last year stemming from destocking.
- 12M EBITDA grew by 59% to RUB 139.5 bn supported by higher top line and cost control efforts. The same drove EBITDA margin up 2 p.p. to reach 42%.
- Our Q4 EBITDA deserves particular attention. This metric was influenced by both recognition of sales of Gokhran's diamonds (RUB 1.7 bn) purchased at auctions in 2021 and an increased share of small-size diamonds which reduced revenue per carat by ca. $12/ct vs Q3'21, which reduced per unit return on sales in Q4.
- 12M FCF increased by 33% and reached RUB 105.9 bn on the back of high margins, working capital release (+RUB 11.3 bn), and conservative capex. Q4 FCF amounted to RUB 16.7 bn, bringing FCF to RUB 41.2 bn in 2H 2021.
- During 12M 2021 we paid as high as RUB 135 bn in dividends (interim dividends for 2H 2020 and 1H 2021), which is an all-time high in the Company's history.
- Since 12M total dividends exceeded the FCF by 27%, our leverage (ND / LTM EBITDA) increased to 0.4x as at the end of 2021 (at the end of Q3'21: 0.1x), though still staying below the targeted range of 0.5-1.0x.
In 2022, the Company intends to go on with its operational efficiency strategy, which will enable ALROSA to partially offset inflationary pricing pressure from key input materials and growth in run of mine volumes."
[1]FCF (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).
[2]Net debt is the amount of debt less cash and cash equivalents and bank deposits at each reporting date in accordance with the IFRS.
[3] The size of the global diamond jewelry market was revised due to methodology change
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ALROSA PJSC published this content on 02 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 March 2022 10:16:00 UTC.
