Alrosa 2Q 20 - Locally bad quarter leaves next year estimates unchanged
Today, Alrosa published its 2Q 2020 financial results, which came in overall in line with our expectations on revenue, net income and EBITDA, though the latter fell marginally short of our estimate in light of higher-than-expected cost of materials. The only negative surprise came from the WC eating away NOCF on the back of the inventory accumulation and decrease in payables. Capex was in line with our expectation and confirms the full-year guidance of RUB 20 bn. We treat the results as slightly negative and see only a limited amount of risk for our 2020e forecast. However, we do not see any risks for both the investment case and long-term estimates.AK Alrosa PAO. AK Alrosa PAO (Aktsionernaya kompaniya ALROSA PAO or ALROSA Company PJSC), formerly AK Alrosa OAO, is a Russia-based company which is principally engaged in the exploration, mining, manufacture and sales of diamonds. Its operations include five Integrated Mining and Processing Complexes: Mirny, Udachny, Aikhal, Anabar and Nyurba located in the Sakha Republic; sorting divisions and diamond cutting and polishing division. The Company is a member of variable diamonds associations. It operates through several representative offices, branches and subsidiaries, including Alrosa-Nyurba OAO, Almazy Anabara OAO and Severalmaz OAO.
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