Alrosa - 4Q18 Trading Update and Earnings Preview
Alrosa's 4Q18 production came in line with guidance, while diamond sales in carat terms were at the upper end of the guided range. However, gem-quality price performance was weak, with average realized prices falling 23% Q-o-Q to $153/ct, 10% below our estimate. Importantly, Alrosa saw no improvement in demand for small stones in 4Q, while the CEO has admitted that the product mix of the inventory deteriorated during 2018. We lower our 4Q18 EBITDA forecast by 4% to $360 mln and incorporate the operating results into our model.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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