Alrosa - 1Q19 IFRS In Line on EBITDA, FCF Stronger
Alrosa reported today its 1Q19 IFRS results. EBITDA came generally in line with the consensus estimates and somewhat outperformed our forecasts. Leveraged FCF generation surprised to the upside thanks to a working capital release and fairly low capex (although capex should likely to pick up later this year). At the current USD/RUB rate, Alrosa is trading at a strong 12% FCF yield. That said, we retain our HOLD recommendation due to the structural risks associated with the development of the lab-grown diamond market.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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