Friday January 15, 2021 15 January 2021

STOCK REVIEW

Alrosa Co Ltd. (MICEX:ALRS), Russia's 3rd largest Mining company by market cap, is currently the 5th lowest price earnings stock in the MOEX Russia Index of 36 stocks.

The price earnings ratio is 12.1.

The earnings yield of 8.3% is 1.4 times the 10-year bond yield of 6.0%.

The stock has decreased RUB1.31 (1.2%) from its previous trading session to close at RUB104.11. Compared with the MOEX Russia Index which fell 39.9 points (1.1%) in the day, the relative price change was -0.1%.

ALRS Stock Dashboard [traded in Russian Ruble, RUB]

CurrencyUSD 1 = RUB 73.45 Dividend Yield2.5%
Jan 15 closeRUB104.11SectorMining
Ave Daily Volume19,866,831 sharesShares Outstanding7,364,970,000
52-Week Range (In RUB)48.97 - 108.88Market CapRUB766.8 billion [$10.4 billion]
P/E12.1EPS Growth (FY2019 vs FY2018)-30%

ALRS Financials Summary: EPS down 30% to RUB8.60 in FY2019

+ Net profit was down 30.5% from $1.2 billion in FY2018 to $835.3 million in FY2019.

+ Earnings Per Share (EPS) was down 30% from RUB12.29 in FY2018 to RUB8.60 in FY2019.

Year ended DecFY2019FY2018FY2017
Sales ($ B)3.243.7
Pretax ($ B)1.11.51.4
Net ($)835.3M1.2B1.1B
EPS (RUB)8.612.2910.47

DATA DOWNLOAD CENTER

ALRS: EXCEL TABLES ARE AVAILABLE TO EXPORT DATA:

+ PRICE VOLUME - 5-YEAR HISTORY

+ FINANCIALS - 10-YEAR HISTORY [INCLUDING FY 2019]:

+ PEER COMPARISON - STOCK IN MINING SECTOR AND STOCK IN INDICES

ALRS: LINKS IN HTML TO FURTHER INFORMATION:

+ NEWS ARCHIVES - ALRS PAST 3 YEARS IN HTML:

+ PRICE VOLUME CHARTS IN HTML

+ USD vs RUB EXCHANGE RATE CHARTS IN HTML

INDEX

SECTION 1 Recent News

SECTION 2 Corporate Profile and Independent Ratings

SECTION 3 Today's Bearish Signals

SECTION 4 Ongoing Bearish Parameters

SECTION 5 Today's Bullish Signals

SECTION 6 Ongoing Bullish Parameters

SECTION 7 Board of Directors

SECTION 8 Dividend

SECTION 9 Financials H1/2020, FY 2019, Past 10 Years

SECTION 10 Peer Group Analysis & Ranking

SECTION 11 Currency Synopsis: Russian Ruble (RUB)

SECTION 12 Credit Rating Summary

Glossary

SECTION 1 Recent News

1.1 FY 2020

Alrosa Co Ltd jumps 21% in 2020

Alrosa Co Ltd. (MICEX:ALRS), Russia's 3rd largest Mining company by market cap, has jumped RUB17.19 (or 21%) in 2020 to close at RUB99.0. Compared with the MOEX Russia Index which has risen 8.0% in 2020, this is a relative price increase of 13%.

Average daily volume of 17.2 million shares in 2020 was 1.6 times the average daily volume in 2019.

SECTION 2 Corporate Profile and Independent Ratings

2.1 Activities

Alrosa is Russia's largest diamond company engaged in exploration, mining, manufacture and sales of diamonds and one of the world's major rough diamond producers. ALROSA accounts for about 100% of all rough diamonds produced in Russia and for about 20% of the world's rough diamond output.

2.2 Contact Details

Websitehttp://www.alrosa.ru

2.3 Industry & Sector

Classification LevelName of Sector
Economic SectorBasic Materials
Business SectorMineral Resources
Industry GroupMetals & Mining

2.4 Independent Ratings

+ Forbes 2000:

Alrosa Co Ltd. is the 1365th largest by revenue in the Forbes Global 2000.

SECTION 3 Today's Bearish Signals

3.1 Rank in the bottom 15% by Relative Valuation in the Russian market

DescriptionValueRank
P/E * P/NTA38.03In Bottom 15%
Price to Sales3.2In Bottom 12%
Price to Book Value3.1In Bottom 11%

3.2 Overvaluation

Earnings Yield of 8.3% < Russian ave of 11.7% > Bond Yield of 6.0%:

- Earnings yield of 8.3% is less than the Russian average earning yield of 11.7%.

- The earnings yield of 8.3% is 1.4 times the 10-year bond yield of 6.0%.

(All figures in %)

Earnings Yield8.3
Russian avg11.7
Dividend Yield2.5
Bond Yield6.0

Dividend Yield of 2.5% < Index avg of 4.9%:

- The relative yield of the stock, defined by its yield of 2.5%, divided by average yield of dividend yielding stocks in the MOEX Russia Index of 4.9% is 51.6%. This suggests the stock is overvalued in dividend yield terms.

3.3 Other Bearish Signals

- Return on Equity of 24.7% versus sector average of 49.1%.

- Return on Assets of 14.6% versus sector average of 19.6%.

- Return on Capital Employed of 22.3% versus sector average of 29.6%.

3.4 Overbought/Bearish Signals:

- The Relative Strength Index (RSI) of 76.2 has penetrated the overbought line of 70, suggesting the price gain of 8.3% in the last 14 days is unusually high.

- The Money Flow Index [MFI] is 81.8 suggesting an overbought 14-day trend, being above 80. The Money Ratio of 4.5 suggests positive money flow was 4.5 times negative money flow.

- The Stochastic indicator of 85.4 has broken through the overbought line of 80; this indicates the price is close to its 14-day high and is likely to revert to a downtrend.

SECTION 4 Ongoing Bearish Parameters

4.1 Alrosa Co Ltd sees dividend fall for a second consecutive year

Alrosa Co Ltd reported dividends per share of RUB2.63 in the past year, down 66.9% from the previous year. This is the second consecutive dividend decrease. In the past 2 years average annual compound growth rate of dividends was -51.5%.

4.2 EPS growth [FY2019 vs FY2018] of -30.0%:

FYEPS (RUB)Growth %
20198.6-30.0
201812.2917.4

4.3 Revenue, EPS, and EBITDA:

- Revenue growth, Earnings per share growth and EBITDA growth have shown signs of deterioration in recent years. [compared with previous year, all figures in %]

FYRevenue GrowthEPS GrowthEBITDA Growth
2019-21-30-29
201891714

4.4 Satisfies 4 out of 9 criteria of Joseph Piotroski [pass mark 5]:

- Positive net income.

- Positive operating cashflow.

- Good quality of earnings [operating cashflow exceeds net income].

- Improvement in current ratio from 2.1 to 2.8.

4.5 Year-over-year (%) Change in Dividend:

Final dividend for FY 2019 was RUB2.63. The year-on-year change was down 36.0% from RUB4.11 in the previous year FY 2018.

FinalFY 2018FY 2019
Dividend (RUB)4.112.63

SECTION 5 Today's Bullish Signals

5.1 Momentum Up 1.2% Past Week

Alrosa Co Ltd outperformed the MICEX Index in 3 out of 5 days. The price ranged between a low of RUB104.17 on Friday, Jan 08 and a high of RUB107.46 on Tuesday, Jan 12.

DayAlrosa Co LtdClose price [RUB]Price change %Relative change % *Comment
ThursdayFalls for a second consecutive day, a two-day fall of 1.9%105.42-0.7-1.3VI*=1.4
WednesdayOffers 4th lowest Price Earnings in MOEX Russia Index, after price drop106.13-1.2-1.2Steepest Fall; VI*=1.8
TuesdayHits year-high 9th time in one month107.461.51.8VI*=1.5
MondayOffers 4th lowest Price Earnings in MOEX Russia Index, despite price rise105.851.60.8VI*=1.7
FridayHits year-high 9th time in one month104.173.20.7Top Rise; VI*=1.2

* Relative change is price change of stock with respect to Benchmark Index, MICEX Index.

[Volume Index (VI); 1 is average]

5.2 Rank in the top 11% by Price Performance in the Russian market

DescriptionValueRank
Price/MAP501.17In Top 8%
Rel Strength 6 mo91In Top 10%
1-month Price Change %15.2In Top 11%

5.3 Uptrend

Price/Moving Average Price of 1.42 and positive MACD:

- The Price/MAP 200 of 1.42 for Alrosa Co Ltd is higher than the Price/MAP 200 for the MOEX Russia Index of 0.93.

- The price to 200-day MAP ratio is 1.42, a bullish indicator. In the past 200 days this ratio has exceeded 1.42, five times suggesting further upside. The stock is trading above both its MAPs and the 50-day MAP of RUB88.72 is higher than the 200-day MAP of RUB73.41, a bullish indicator. The 200-day MAP has increased to RUB73.41. An increase is another bullish indicator.

- The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 102.46 minus the 26-day EMA of 98.12 is positive, suggesting a bullish signal. Both the 12-day EMA as well as the 26-day EMA are rising, another bullish signal.

- The price to 50-day EMAP ratio is 1.1, a bullish indicator. In the past 50 days this ratio has exceeded 1.1, 16 times suggesting further upside. The 50-day EMAP has increased to RUB92.36. An increase is another bullish indicator.

Past Month:

- Rises to Falls: In the past month the number of rises outnumbered falls 13:7 or 1.9:1.

- Alrosa Co Ltd stock was the second highest performer in the MOEX Russia Index.

Past Quarter:

- In the last three months the stock has hit a new 52-week high sixteen times, pointing to a significant uptrend.

The Best 3 weeks in the past quarter

In the past quarter the week beginning Monday November 16 saw the highest weekly rise of 12.6% for a relative price increase of 11.8%. The rise was propped up by volume of 1.8 times average.

Mon-FriChange %MICEX Index Change %RPC %Vol Ind [1 is avg]
Nov 16-2012.60.911.81.8
Nov 02-068.56.71.81
Jan 04-085.250.20.8

Relative Strength (6 months) 91 percentile:

- The stock has a 6-month relative strength of 91 in the Russian market of 155 stocks and 40 preference stocks which means it is beating 91% of the market.

5.4 Undervaluation

Price/Earnings:

Alrosa Co Ltd stock is trading at the seventeenth lowest P/E multiple in the MOEX Russia Index.

Price/Earnings of 12.1 < sector avg of 13.7:

- Price/Earnings of 12.1 versus sector average of 13.7.

MCap/Total Assets:

- Tobin's Q Ratio, defined as MCap divided by Total Assets, is 1.8. Compared with the rest of the market the stock is undervalued.

5.5 Other Bullish Signals

- Total Liabilities/EBITDA of 2.2 is less than 5, this compares favourably with the Joseph Piotroski benchmark of 5.

- Over the last 3 years average annual compound growth rate of earnings per share was 19.7%. This is considered moderate.

- Net profit margin has averaged 28.4% in the last 3 years. This is considered superior and suggests a high margin of safety.

- As per the Du Pont analysis, Return on Equity is high at 24.7%. This is computed as net profit margin of 26.3% times asset turnover [sales/assets] of 0.55 times leverage factor [total assets/shareholders' equity] of 1.7.

SECTION 6 Ongoing Bullish Parameters

6.1 Rank in the top 10% by Size in the Russian market

DescriptionValueRank
Ave daily TurnoverRUB1.7 billion ($23.4 million)In Top 9%
MCap$10.4 billionIn Top 10%

6.2 Rank in the top 23% by Performance in the Russian market

DescriptionValueRank
Net Profit Margin %26.3In Top 23%

6.3 Rank in the top 19% by Productivity in the Russian market

DescriptionValueRank
Return on Assets [ROA] %14.6In Top 15%
Return on Equity [ROE] %24.7In Top 17%
Return on Capital Employed [ROCE] %22.3In Top 19%

6.4 Present Value of RUB1000 Invested in the Past [3 Mo, 1 Yr, 3 Yrs]; The Best Periods with PVRUB1000 > 1,246

PVRUB1,0003 mo ago1 yr ago3 yrs ago
ALRS.MICEXRUB1,381RUB1,247RUB2,339
Mining sectorRUB1,627RUB1,576RUB2,436
MOEX Russia IndexRUB1,231RUB1,101RUB1,527

6.5 The Best Periods [3 Mo, 1 Yr, 3 Yrs] with Price Change % > 19.6

3-Year price change of 76.5% for Alrosa Co Ltd outperformed the change of 52.7% in the MICEX Index for a relative price change of 23.7%.

Price Change %QuarterYear3 Years
Alrosa Co Ltd38.119.776.5
Mining sector62.759.3146.7
MICEX Index23.310.252.7

6.6 Moving Annual Return of 22.8% in the past year:

Moving Annual Return was 22.8% in the past year. Based on a dynamic start date of 5 years ago, the real rate of return has averaged 37.2%. The Moving Annual Return has been positive in 4 of the last 5 years.

ALRSClose (RUB)Dividends (RUB)Capital Gain / (Loss) %% YieldAnnual Return %
Jan 15104.112.6319.7322.8
1 Yr ago86.947.95(2.8)8.96.0
2 Yrs ago89.4811.1751.718.970.6
3 Yrs ago58.998.93(17.5)12.5(5.1)
4 Yrs ago71.542.0986.45.491.8

Close 5 years ago RUB38.39

6.7 MCap: 3-Year Increase of RUB205 billion [$3 billion]

In the past 3 years Market Capitalization has increased by RUB204.9 billion (36%) from RUB561.9 billion to RUB766.8 billion. Based on a dynamic start date of 3 years ago, there have been declines in MCap in 2 out of 3 years.

PriceMCap (RUB B)MCap ($ B)
LastRUB104.11766.810.4
1 Year agoRUB86.9466710.9
2 Years agoRUB89.48762.411.4
3 Years agoRUB58.99561.99.9

6.8 Annualised Period-based Total Shareholder Returns [TSR %]: The Best Periods with TSR > 24.6%

TSR %1 yr3 yrs5 yrs
ALRS.MICEX24.732.433.5

6.9 Low Debt to Equity (%)

The debt to equity ratio of 46.2% is under a safe benchmark figure of 50%. However, it has deteriorated in the past two years.

YearsDebt to Equity (%)
Dec 201946.18
Dec 201843.08
Dec 201735.06
Dec 201655.05
Dec 2015147.28

6.10 Increased Volume, up 114% in 5 years

In the past five years, Average Daily Volume of Trading (ADVT) has increased 113.7% to 19.9 million shares.

Avg. Daily Volume Traded 12 months ended Jan 15, million shares

YearADVT
202119.9
202011.3
201911.2
201813.4
20179.3

6.11 Increased VWAP, up 44% in 5 years

In the past five years Volume Weighted Average Price (VWAP) has increased by 43.9% to RUB72.53. .

Past five years, 12 months ended Jan 15 (RUB)

YearHigh PriceVWAPLow Price
2021108.8872.5348.97
202090.7674.8662.92
201990.4275.9758.85
201876.1857.454.39
201772.5850.3935.64

6.12 Increased share turnover, up 205% in 5 years

In the past five years, average daily share turnover has increased 205.2% to RUB1.4 billion ($19.1 million). This suggests increased liquidity.

Past five years, 12 months ended Jan 15 (RUB billion)

YearAverage Daily Turnover
20211.4
20200.82
20190.83
20180.76
20170.46

6.13 Satisfies two criteria of Benjamin Graham

-"Total debt less than tangible book value"; total debt of RUB117.3 billion (US$1.9 billion) is less than tangible book value of RUB244.2 billion (US$3.9 billion).-"Current ratio of two or more"; current assets are 2.8 times current liabilities.

-"Total debt equal or less than twice the net quick liquidation value"; total debt of RUB117.3 billion (US$1.9 billion) is 1.9 times the net liquidation value of RUB61.45 billion (US$990.9 million).-"Stability of growth in earnings over the last 5 years, defined as no more than two declines of 5% or greater in year-end earnings";there have been 2 declines in earnings in the last 5 years.

SECTION 7 Board of Directors

7.1 Board and Management

NameDesignationSince Appointment
Sergey IvanovPresident-
Ivan Kirillovich DemyanovVice President16 Yrs
Yuri OkoyomovVice President-

7.2 Profiles

Sergey Ivanov

President

Mr. Sergey Ivanov was born on October 23, 1980 in Moscow. In 2001, he graduated from the Moscow State Institute of International Relations with a degree in economics. In 2002, with a degree in finance and credit. In 2002 - 2005, Mr. Ivanov held various positions in the State Investment Company and OAO Gazprom. In 2005 - 2011, worked as vice president, first vice president, deputy chairman of the board of JSC GAZPROMBANK. 2011 - 2016, was chairman of the board of SOGAZ. Since April 2016, before becoming ALROSA's president Mr. Ivanov acted as senior vice president and head of the Wealth Management of PJSC Sberbank. Sergey Ivanov is a member of the boards of RNG Joint Stock Company, NPF Gazfond, JSC GAZPROMBANK. On March 13th 2017 elected as the president of ALROSA. He has no family ties with any members of ALROSA's executive or supervisory bodies.

Ivan Kirillovich Demyanov

Vice President

Shareholder Value:

Creation of shareholder value in Alrosa Co Ltd:

Year of appointment: 2005

In the last 5 years the average annualized return to shareholders was 33.5%. The present value of RUB1,000 (PV1000) invested 5 years ago is now RUB4,237, a gain of RUB1,712 and dividend reinvested of RUB1,525.

Yuri Okoyomov

Vice President

Mr. Yury K. Okoemov was born in 1962 in the village Kazachye, Verkhoyansk Region, Yakut ASSR. He is a graduate of the Physics and Mathematics school in Verkhnevilyuisk, Yakut ASSR (1979). He is a graduate of the Moscow State Institute of Steel and Alloys with a Diploma in Physics of Metals (1985), and the Academy of National Economy under the Government of the Russian Federation, qualified as Executive Manager (1996). Honorary titles and awards: Honorary Diploma of the Government of the Republic of Sakha (Yakutia) - 2002 Title of Honor "Honored Worker of ALROSA" - 2008 Participation interest in the authorized capital of Public Joint Stock Company ALROSA - 0.0073%. He has no family ties with any members of ALROSA's executive or supervisory bodies. Previously held positions include: He started his career in 1985 as a senior laboratory assistant in the Institute of Physical and Technological Problems of the North, Yakut Branch of the Siberian Division, the USSR Academy of Sciences, where he served until 1992. In 1988-1989 - worker, carpenter-concrete-finisher, carpenter-steel fixer, Trust Yakutzhilstroy, Trust Spetsstroymekhanizatsia, Glavyakutstroy (Yakutsk), at the construction of a Youth Residential Complex. Since 1992 - expert, lead expert, Diamond Instruments Section, JSC Tuimaada Diamond. In 1992-1993 - head, Monocrystal Instrument Section; technical director, JSC Sakha Diamond. In 1993-2000 - First Deputy Director, Director, Yakutsk Diamond Trading Enterprise (YAPTA) of ALROSA. In 2000-2009 - General Director, United Selling Organization of ALROSA. Since August 6, 2009 - Vice President of ALROSA. He is in charge of the Company sales policy.

SECTION 8 Dividend

8.1 Dividend History

In the past 5 years annual dividends have increased by RUB0.5 from RUB2.1 to RUB2.6. Based on a start date of 5 years ago, there has been only two decline in dividends over the last 5 years.

DateValue (RUB)Type
10 Jul 20202.63Final
Tr 12 Months2.63
2019 - 20207.95
2018 - 201911.17
2017 - 20188.93
2016 - 20172.09

SECTION 9 Financials H1/2020, FY 2019, Past 10 Years

9.1 Half-Yearly Report: Key Parameters

Alrosa Co Ltd half year profits hit by 92% fall

Release Date: October 26, 2020

Alrosa Co Ltd (MICEX:ALRS), announced net profit of RUB3.1b ($43.9m) for the half year-ended 30 June 2020, down 91.7% from the previous corresponding period.

Compared with the Previous Corresponding Period [PCP; H/30 Jun 2019], year-over-year [y.o.y.] Revenue was down 42.8% and Net Profit was down 91.7%.

Half year-ended30 Jun 202030 Jun 2019
EPS43.0KopeckRUB5.2
PCP growth in EPS %-92-
Revenue, RUB billion73.1128
Revenue, $ billion1.01.8
PCP growth in Revenue %-42.8-
Net Profit, RUB billion3.137.1
Net Profit, $ million43.9529
PCP growth in Net Profit %-92-

Currency Conversion (June 30, 2020): $1 = RUB70.1

Currency Conversion (June 30, 2019): $1 = RUB63.28

9.2 Financial Results as reported (Half Year)

RESULTS OF OPERATIONS AND FINANCIAL CONDITION

(In RUB Million, except per share data and shares outstanding)

INCOME STATEMENT AS REPORTED

DescriptionRUB MillionRUB Million
Jun 3020202019Change %
Revenue70,941125,446Down 43.4
Income from government grants2,2012,417Down 8.9
Cost of sales-36,441-66,504Improved 45.2
Royalty-605-605Steady
Gross profit36,09660,754Down 40.6
General and administrative expenses-6,456-6,175Deterioration 4.6
Selling and marketing expenses-1,370-1,293Deterioration 6.0
Other operating income2,8352,590Up 9.5
Other operating expenses-13,463-12,339Deterioration 9.1
Operating profit17,64243,537Down 59.5
Finance income / (costs) net-13,8393,033Deterioration
Share of net profit of associates and joint ventures1,3181,858Down 29.1
Profit before income tax5,12148,428Down 89.4
Income tax-1,800-10,917Improved 83.5
Profit for the period3,32137,511Down 91.1
Other comprehensive income / (loss):
Items that will not be reclassified to profit or loss:
Remeasurement of post-employment benefit obligations net of deferred tax-926-1,113Improved 16.8
Total items that will not be reclassified to profit or loss-926-1,113Improved 16.8
Items that will be reclassified to profit or loss:
Currency translation differences net of deferred tax303-162Recovery
Total items that will be reclassified to profit or loss303-162Recovery
Total other comprehensive loss for the period-623-1,275Improved 51.1
Total comprehensive income / (loss) for the period2,69836,236Down 92.6
Profit attributable to:
Owners of PJSC ALROSA3,07937,094Down 91.7
Non-controlling interest242417Down 42.0
Profit for the period3,32137,511Down 91.1
Total comprehensive income / (loss) attributable to:
Owners of PJSC ALROSA2,59135,705Down 92.7
Non-controlling interest107531Down 79.8
Total comprehensive income / (loss) for the period2,69836,236Down 92.6
Basic and diluted earnings per share for profit attributable to the owners of PJSC ALROSA (in Russian roubles)43.0 KopeckRUB5.15Down 91.7
Weighted average number of ordinary shares641,000,000641,000,000Steady

BALANCE SHEET AS REPORTED

DescriptionRUB MillionRUB Million
Jun 30, 2020Dec 31, 2019Change %
ASSETS
Non-current Assets
Goodwill1,4391,439Steady
Properly plant and equipment224,230226,261Down 0.9
Right-of-use assets7,8078,368Down 6.7
Investments in associates and joint ventures10,5548,487Up 24.4
Deferred tax assets6,1475,637Up 9.0
Financial assets at fair value through profit or loss100191Down 47.6
Long-term accounts receivable1,033982Up 5.2
Total Non-current Assets251,310251,365Down
Current Assets
Inventories144,642121,302Up 19.2
Prepaid current income tax2,564440Up 482.7
Trade and other receivables12,45515,161Down 17.8
Bank deposits50,15924,340Up 106.1
Cash and cash equivalents65,47113,315Up 391.7
Non-current assets held for sale4,1754,175Steady
Total Current Assets279,466178,733Up 56.4
Total Assets530,776430,098Up 23.4
EQUITY
Share capital12,47312,473Steady
Share premium10,43110,431Steady
Treasury shares-264-264Steady
Retained earnings tuid other reserves214,369230,737Down 7.1
Equity attributable to owners of PJSC ALROSA237,009253,377Down 6.5
Non-Controlling Interest696589Up 18.2
Total Equity237,705253,966Down 6.4
LIABILITIES
Non-current Liabilities
Long-term debt and other financial liabilities143,90284,171Up 71.0
Provision for pension obligations8,4477,731Up 9.3
Other provisions11,94711,572Up 3.2
Deferred tax liabilities3,5554,684Down 24.1
Government grants2,9103,073Down 5.3
Other liabilities802714Up 12.3
Total Non-current Liabilities171,563111,945Up 53.3
Current Liabilities
Short-term debt and other financial liabilities72,33433,113Up 118.4
Trade and other payables22,14921,205Up 4.5
Income lax payable1,5512,088Down 25.7
Other taxes payable6,3027,572Down 16.8
Dividends payable19,172209Up 9,073.2
Total Current Liabilities121,50864,187Up 89.3
Total Liabilities293,071176,132Up 66.4
Total Equity and Liabilities530,776430,098Up 23.4

CASH FLOW AS REPORTED

DescriptionRUB MillionRUB Million
Jun 3020202019Change %
(Net Cash Outflow) used in Operating Activities / Net Cash Inflow from Operating Activities-1,13536,668Deterioration
Cash Flows from Investing Activities
Purchase of property plant and equipment-7,183-8,410Improved 14.6
Proceeds from sales of property plant and equipment801,878Down 95.7
Interest received694689Up 0.7
Sale of financial assets at fair value through profit or loss544343Up 58.6
Dividends received from associates and joint ventures1,5493,037Down 49.0
Proceeds from disposal of subsidiaries net of cash disposed of1,570
Cash transfer to deposit accounts-63,612-52,337Deterioration 21.5
Cash received from deposit accounts39,91114,334Up 178.4
Income from grants257
Net Cash Outflow used in Investing Activities-28,017-38,639Improved 27.5
Cash Flows from Financing Activities
Repayments of loans-278-65,141Improved 99.6
Loans received86,63652,597Up 64.7
Lease obligation payments-602-504Deterioration 19.4
Interest paid-3,451-4,790Improved 28.0
Dividends paid-18
Net Cash Inflow from Financing Activities / (Net Cash Outflow) used in Financing Activities82,305-17,856Recovery
Net Increase / (Decrease) in Cash and Cash Equivalents53,153-19,827Recovery
Cash and cash equivalents at the beginning of the period13,31527,437Down 51.5
Effect of exchange rate changes on cash and cash equivalents-997-1,904Improved 47.6
Cash and Cash Equivalents at the End of the period65,4715,706Up 1,047.4

9.3 Annual Report (FY 2019): Key Parameters

Alrosa Co Ltd profits hit by 30.5% fall

Release Date: October 23, 2020

Alrosa Co Ltd (MICEX:ALRS) reported net profit for the year-ended 31 December 2019 [FY2019] of RUB62.0b ($1.0b), down 30.5% from RUB89.2b ($1.3b) in the previous year [FY2018]. Earnings per share (EPS) were down 30% from RUB12.29 (US17.69c) in FY2018 to RUB8.6 (US13.87c) in FY2019.

Annual growth in Revenue, Net Profit and EPS

Year-ended31 December [FY/2019]31 December [FY/2018]
Revenue, RUB Billion238300
Revenue, $ Billion3.84.8
Growth in Revenue %-20.58.8
Net Profit, RUB Billion62.089.2
Net Profit, $ Billion1.01.4
Growth in Net Profit %-30.513.5
EPS, RUB8.612.29
Growth in EPS %-30.017.4

Major changes compared with previous year (FY2019 vs FY2018):

Favourable Changes:

- Sales and marketing expenses to Sales down from 1.6% to 1.2%

- Current ratio up 34.3% from 2.1 to 2.8

- Working capital to total assets up from 19.5% to 26.6%

- Total current assets to Total Assets up from 37.6% to 41.6%

- Total Liabilities to EBITDA of 2.2 compares favourably with the Joseph Piotroski benchmark of <5. However, it has deteriorated by 51% from the previous year's ratio of 1.4.

- Total Liabilities to Operating Cash Flow of 2.6 compares favourably with the Joseph Piotroski benchmark of <4. However, it has deteriorated by 91.9% from the previous year's ratio of 1.4.

Unfavourable Changes:

- Net profit slumps 30.5% from RUB89.2b ($1.3b) to RUB62.0b ($1.0b)

- Total revenue down 20.5% from RUB299.6b ($4.3b) to RUB238.2b ($3.8b)

- EPS slumps 30% from RUB12.29 (US17.69c) to RUB8.6 (US13.87c)

- EBIT Margin down from 39.0% to 35.0%

- EBIT to total assets down from 27.9% to 18.9%

- Total revenue to total assets down from 0.7 to 0.6

- Cost of Goods Sold to Sales up from 43.5% to 51.7%

- Profit before tax to Sales down from 39% to 35%

- Administration expenses to Sales up from 4% to 5.5%

- Debt to Equity up 7% from 0.4 to 0.5

- Total non-current assets to Total Assets down from 62.4% to 58.4%

- Fixed Assets to Total Assets down from 57.1% to 52.6%

Note:

- Total liabilities to Total assets steady at 0.4

- Retained earnings to total assets steady at 53.6%

- Current Inventory to Total Assets up from 20.1% to 28.2%

- Short-term investments to Total Assets up from 2.9% to 6.6%

Year-on-year comparison of Performance Ratios [FY2019 vs FY2018]

December 31FY2019FY2018Change (%)
Return on Equity (%)24.736.5Down 32.3
Return on Assets (%)14.622Down 33.6
Total debt to net tangible assets (%)4843.3Up 10.9
Total Liabilities to EBITDA2.21.4Up 51
Total Liabilities to Operating Cash Flow2.61.4Up 91.9
Debt/Equity0.50.4Up 7
Total Liabilities/Total Assets (Up 2.5% from 0.4 to 0.41)0.40.4Up 2.5
Current Ratio2.82.1Up 34.3
Common Size Ratios by Assets %
Total non-current assets to Total Assets 58.4 62.4 Down 6.4
Fixed Assets to Total Assets 52.6 57.1 Down 7.9
Total current assets to Total Assets 41.6 37.6 Up 10.5
Current Inventory to Total Assets 28.2 20.1 Up 40.4
Short-term investments to Total Assets 6.6 2.9 Up 130.3
Common Size Ratios by Sales %
Cost of Goods Sold to Sales 51.7 43.5 Up 18.9
Profit before tax to Sales 35.0 39.0 Down 10.3
Administration expenses to Sales 5.5 4.0 Up 37.7
Sales and marketing expenses to Sales 1.2 1.6 Down 23.4
Tax expenses to Sales (8.0) (8.2) Up 2.9

Currency Conversion (December 31, 2019): $1 = RUB62.01

Currency Conversion (December 31, 2018): $1 = RUB69.47

Three-year record of growth and performance:

In the last 3 years Total Revenue averaged RUB271.1B ($4.4B), EBITDA averaged RUB99B ($1.6B) and Net Profit averaged RUB76.6B ($1.2B). Compound Annual Growth Rate (CAGR) averaged -9.8% for Total Revenue, -22.1% for Net Profit and -17.1% for EBITDA.

DescriptionAnnual (RUB B)Annual ($ B)3-year Avg (RUB B)3-year Avg ($ B)3-year CAGR %
Total Revenue238.23.8271.14.4(9.8)
EBITDA81.51.3991.6(17.1)
Operating Profit81.51.3991.6(17.1)
Net Profit62176.61.2(22.1)

Three-year record of EBITDA, Operating Profit, Net Profit, ROE, ROA and ROCE

In 2019 Net Profit Margin of 26.9% was below its 3-year Avg of 28.4% (All Figures in %)

Description20193-year Avg
EBITDA Margin34.236.3
Operating Profit Margin3536.3
Net Profit Margin26.928.4
Return on Equity24.730.2
Return on Assets14.618.3
Return on Capital Employed22.328.3

9.4 Financial Results as reported (FY 2019)

RESULTS OF OPERATIONS AND FINANCIAL CONDITION

(In RUB Million, except per share data and shares outstanding)

INCOME STATEMENT AS REPORTED (FY 2019)

DescriptionRUB MillionRUB Million
Dec 3120192018Change %
Revenue232,856293,870Down 20.8
Income from government grants5,3305,775Down 7.7
Cost of sales-119,071-126,541Improved 5.9
Royalty-1,209-1,209Steady
Gross profit117,906171,895Down 31.4
General and administrative expenses-12,830-11,735Deterioration 9.3
Selling and marketing expenses-2,794-4,606Improved 39.3
Other operating income6,7345,383Up 25.1
Other operating expenses-33,873-33,842Deterioration 0.1
Operating profit75,143127,095Down 40.9
Finance (costs) / income net2,828-15,901Recovery
Share of results of associates and ioint ventures3,4853,418Up 2.0
Profit before income tax81,456114,612Down 28.9
Income tax-18,726-24,208Improved 22.6
Profit for the year62,73090,404Down 30.6
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Remeasurement provision of pension obligations net of deferred tax1,417-1,115Recovery
Total items that will not be reclassified to profit or loss1,417-1,115Recovery
Items that may be reclassified subsequently to profit or loss:
Currency translation differences net of tax-236177Deterioration
Total items that may be reclassified subsequently to profit or loss-236177Deterioration
Total other comprehensive income / (loss) for the year1,181-938Recovery
Total comprehensive income for the year63,91189,466Down 28.6
Profit attributable to:
Owners of PJSC ALROSA62,02689,217Down 30.5
Non-controlling interest7041,187Down 40.7
Profit for the year62,73090,404Down 30.6
Total comprehensive income attributable to:
Owners of PJSC ALROSA63,07288,279Down 28.6
Non-controlling interest8391,187Down 29.3
Total comprehensive income for the year63,91189,466Down 28.6
Basic and diluted earnings per share for profit attributable to the owners of PJSC ALROSA (in Roubles)RUB8.60RUB12.29Down 30.0

BALANCE SHEET AS REPORTED (FY 2019)

DescriptionRUB MillionRUB Million
Dec 3120192018Change %
ASSETS
Non-current assets
Goodwill1,4391,439Steady
Property plant and equipment226,261234,873Down 3.7
Right of use assets8,368
Invesuments in associates and joint ventures8,4875,191Up 63.5
Deferred tax assets5,6374,785Up 17.8
Finacial assets at fiar value through profit or loss191838Down 77.2
Long term accounts receivable9829,316Down 89.5
Total non-current assets251,365256,442Down 2.0
Current assets
Inventories121,30282,619Up 46.8
Prepaid current income tax440639Down 31.1
Trade and other receivables15,16122,271Down 31.9
Bank deposits24,34011,784Up 106.6
Cash and cash equivalents13,31537,437Down 64.4
Non-current assets held for sale4,175
Total current assets178,733154,750Up 15.5
TOTAL ASSETS430,098411,192Up 4.6
EQUITY
Share capital12,47312,473Steady
Share premium10,43110,431Steady
Treasury shares-264-264Steady
Retained earnings and other reserves230,737224,976Up 2.6
Equity attributable to owerns of253,377247,616Up 2.3
Non-controlling interests589-39Recovery
Total equity253,966247,577Up 2.6
LIABILITIES
Non-current liabilities
Long-term debt and other financial liabilities84,17164,974Up 29.5
Provision for pension obligations7,73111,638Down 33.6
Other provision11,5725,586Up 107.2
Deferred tax liabilities4,6843,245Up 44.3
Government grants3,0732,873Up 7.0
Other liabilities714718Down 0.6
Total non-current liabilities111,94589,034Up 25.7
Current liabilities
short term loans and other financial liabilities33,11341,687Down 20.6
Trade and other payables21,20521,835Down 2.9
Income tax payable2,088828Up 152.2
Other taxes payable7,5728,585Down 11.8
Dividends payable209146Up 43.2
Guarantees issued1,500
Total current liabilities64,18774,581Down 13.9
Total liabilities176,132163,615Up 7.7
Total equity and liabijtfties430,098411,192Up 4.6

CASH FLOW AS REPORTED (FY 2019)

DescriptionRUB MillionRUB Million
Dec 3120192018Change %
Net Cash Inflow from Operating Activities67,560120,122Down 43.8
Cash Flows from Investing Activities
Purchase of property plant and equipment-19,974-27,816Improved 28.2
Proceeds from sales of property plant and equipment2,011903Up 122.7
Sale of financial assets at fair value through profit or loss3851,433Down 73.1
Interest received1,9691,912Up 3.0
Proceeds from disposal of subsidiaries net of cash disposed of1,56630,801Down 94.9
Cash transfer to deposit accounts-76,944-17,053Deterioration 351.2
Cash transfer from deposit accounts62,2315,455Up 1,040.8
Acquisition of Kristall group net of cash acquired-1,286
Dividends received from associates5,7391,124Up 410.6
Insurance settlement from SOGAZ10,490
Purchase of shares of PJSC ALROSA-Nyurba-12,000
Government grants6932,938Down 76.4
Net Cash Outflow used in Investing Activities-23,610-1,813Deterioration 1,202.3
Cash Flows from Financing Activities
Repayments of loans-53,324-41,221Deterioration 29.4
Loans received63,69241,871Up 52.1
Interest paid-7,465-5,995Deterioration 24.5
Purchase of treasury shares-14,077
Dividends paid to non-controlling shareholders-215-9Deterioration 2,288.9
Dividends paid-57,246-80,739Improved 29.1
Repayment of lease obligations-1,361
Net Cash Outflow used in Financing Activities-55,919-100,170Improved 44.2
Net (Decrease) / Increase in Cash and Cash Equivalents-11,96918,139Deterioration
Cash and cash equivalents at the beginning of the year27,4377,381Up 271.7
Effect of exchange rate changes on cash and cash equivalents-2,1531,917Deterioration
Cash and Cash Equivalents at the End of the Year13,31527,437Down 51.5

9.5 Download ALROSA CO LTD Financials Past 10 Years

Description (December 31)2019201820172016201520142013201220112010
Income Statement
Revenue per share 37.3937.3321.919.7916.34
Other Revenue 5.3 B5.8 B5.7 B49 M4.2 B3.8 B4.9 B
EBIT 143 B746 M(7.8 B)41.5 B53.2 B50 B29.6 B
Interest (B)28.2911.713.6
Profit before tax (B)169.754.7(7.8)41.444.138.316
Tax (B)(18.7)(24.2)(22.2)36.3(11.7)99.610.511.74.2
Net profit (B)6289.278.6131.441.1(17.9)31.932.626.511.8
EPS 8.612.2910.4717.845.87(2.44)4.254.523.691.6
Balance Sheet
Equity Share Capital (B)253.4247.6266.8257.4
Retained Earnings 230.7 B225 B243.9 B91.7 M115.5 B91.2 B
Total Debt (B)117.3106.793.4141.7224.5122.695.689
Total Assets (B)430.1411.2427.8472.7437.7387.7354.3304.4241222.4
Current Asset (B)178.7154.8168.5172.9137.5104129.573.665.449.1
Fixed Asset (B)226.3234.9236.6288.9285.7224.5169.5168
Working Capital (B)114.580.292.9136.481.450.835.916.422.118.2
Cash Flow
Operating Cash Flow (B)67.6120.1100.5143.189.27855.54249.237.8
Investing Cash Flow (B)(23.6)(1.8)(2.3)53.4(35)(30.8)(40.3)(61.1)(17.9)(9.8)
Financing Cash Flow (B)(55.9)(100.2)(118.5)(73.9)(59.5)(42.3)(11.1)13.6(23)(29.1)
Net Cash Flow (B)(12)18.1(20.4)122.6(5.2)4.84.1(5.5)8.3(1.1)

SECTION 10 Peer Group Analysis & Ranking

10.1 Global Peer Group (all figures in $): Key Financials

In its Global Peer Group of 9 companies ALRS is ranked second by Net Profit, fifth by Relative Str. (6 mo), MCap, sixth by Revenue, Total Assets and eighth by PV $1000 (1 yr).

Name (Code)Relative Str. (6 mo)MCapPV $1000 (1 yr)RevenueNet ProfitTotal Assets
Rank of ALRS558626
Alrosa Co Ltd (ALRS)7810.4B1,036.13.2B844.4M5.9B
Kirkland Lake Gold (KL)2610.8B901.31.4B560.1M2.6B
Teck Resources Class B (TECK.B)8710.8B1,254.79.4B(475.8M)30.9B
Polymetal International (POLY)4510.7B1,540.32.2B480M4.2B
KGHM Polska Miedz (KGH)9010.7B2,062.66.1B383.8M10.6B
Zhejiang Supor - A Share (002032)3710.4B1,230.73.1B297.4M1.8B
South32 (S32)7210.1B1,100.46.1B(65M)13.7B
Evraz (EVR)8810B1,805.312.8B2.4B9.4B
Norsk Hydro (NHY)819.9B1,573.517.9B(214.7M)19.5B

Global Peer Group: Relative Value Indicators

ALRS is ranked first by P/E, third by P/Book, fifth by P/S and eighth by Turnover Rate.

Name (Code)Country CodeLast PriceP/EP/SP/BookTurnover Rate (%)% Disc to 52-w Hi
Rank of ALRS1538
Alrosa Co Ltd (ALRS)RURUB104.1112.33.33.243.53.2
Kirkland Lake Gold (KL)CACAD50.0514.77.66.0141.534.0
Teck Resources Class B (TECK.B)CACAD24.971.176.22.8
Polymetal International (POLY)GBGBX1,658.5021.94.75.569.019.2
KGHM Polska Miedz (KGH)PLPLN198.0527.91.749.110.4
Zhejiang Supor - A Share (002032)CNCNY81.1235.03.410.645.67.8
South32 (S32)AUAUDA2.681.71.181.36.6
Evraz (EVR)GBGBX500.8011.432.05.7
Norsk Hydro (NHY)NONOK40.160.61.256.12.6

10.2 BuySellSignals Fundamentals Valuation Ranking: Alrosa Co Ltd vs Russian Market

Out of 155 stocks in the Russian Market, Alrosa Co Ltd is ranked twentieth by ROA, Twenty-second by Net Profit $, Twenty-fifth by EBITDA Margin% and Thirty-first by P/Earnings.

Russian AvgALRSRankRank 1Rank 2Rank 3Lowest Rank
ROA (%)7.414.62063.4 ALNU43.9 NVTK31.3 NMTP0.01 KBTK
Net Profit $1.2 B844.4 M2219.8 B GAZP11.8 B NVTK9.6 B ROSN(826.5 M) UTAR
EBITDA Margin%14.734.22583.2 ODVA67.98 SFIN61.1 SBER(63.5) UTAR
P/Earnings8.5x12.1x312.3x NMTP3.2x FEES3.4x RNFT-
P/Sales1.1x3.2x340.1x MTLR0.1x AFLT0.1x ROST-
Price/Net Tangible Assets1.2x3.1x340.1x TRNFP0.1x MFGS0.3x MSNG-
ROE (%)15.324.734 140.5 MTSS-
Total Debt/Equity (the lower the better)0.3x0.5x71WTCMWTCMPODVA10.7x NKSH
Yield (%)4.12.57918.8 ALNU18.2 KRKN16 NMTP0.03 KROT
Premium to 52-Wk Low (%)95.96112.61634.5 RLMN5.6 ENRU6.2 PLZL391.8 MAGE
Discount to 52-Wk High (%)2.24.416762.95 TUCH54.4 RLMN49.1 TASBP0.8 MRKZ

Negative values are shown in brackets.

10.3 Market Share

Alrosa Co Ltd vs Mining sector [Mining sector Total in Brackets]

Revenue of RUB238.2 billion ($3.2 billion)[44.7% of aggregate sector revenue of RUB1,389.4 billion; down from 58.3% in the previous year.]

Net Profit of RUB62 billion ($844.4 million) [30.4% of aggregate sector net profit of RUB430.4 billion; down from 72.7% in the previous year.]

EBIT of RUB81.5 billion ($1.1 billion) [31.8% of aggregate sector EBIT of RUB542.6 billion; down from 73.9% in the previous year.]

10.4 Share in Index

Alrosa Co Ltd is a constituent of the following indices. Its market capitalisation accounts for 1.7% of the combined MCap of the RTS Index.

Index NameMCap of Index ($ B)MCap as % of Index
RTS Index600 1.7
MOEX Russia Index613 1.7

10.5 Global Rank [out of 47,979 stocks] and Rank of Alrosa Co Ltd in the Europe Region [out of 7,619 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap ($)10.4B1,782365
Total Assets ($)5.9B4,028777
Revenue ($)3.2B3,245660
Net Profit ($)844.4M1,274280
Return on Equity %24.72,179505
Net Profit Margin %26.34,171856
Price to Book3.225,4853,179
Price/Earnings12.37,1901,135
Yield %2.510,5021,826
PV1000 (1Year) $*1,03623,1234,147
$* Change (1Year) %0.923,7844,307

* 1 year ago $1 = RUB 61.04

Jan 15, 2021: $ 1 equals RUB 73.45

10.6 Rank of Alrosa Co Ltd in the MICEX Index [out of 34 stocks], in the Total Russian Market [out of 220 stocks] and in the Mining sector [out of 13 stocks]

DescriptionValueIn MICEX IndexIn Total Russian MarketIn Mining sector
MCap (RUB)766.8B14163
Total Assets (RUB)430.1B21323
Revenue (RUB)238.2B20313
Net Profit (RUB)62B14173
Return on Equity %24.711304
Net Profit Margin %26.38183
Price to Book3.1171204
Price/Earnings12.118773
Yield %2.522857
PV1000 (1Year) RUB1,24713808

10.7 Long-Term Fundamental Ranking: 4 out of 5 [5 is best]

Alrosa Co Ltd is ranked number 3 out of 14 listed mining companies in the Russia with a market capitalization of RUB766.8 billion ($10.4 billion).

In the mining companies it has the 3rd highest total assets and 2nd highest revenues.

Stocks are scored on a set of parameters reflecting fundamental analytical tools involving valuation, size and financial performance. They are ranked according to the average values of those parameters. The highest ranking is 5 and the lowest ranking is 1.

SECTION 11 Currency Synopsis: Russian Ruble (RUB)

SECTION 12 Credit Rating Summary

Russia:

Rating AgencyLong TermForeign CurrencyDescription
FitchBBB-
Moody'sBaa3
S&PBBB-Considered lowest investment grade by market participants. The minus (-) sign shows relative standing within the major rating category.
FITCHBBB-Good credit quality: 'BBB' ratings indicate that expectations of default risk are currently low. The minus (-) sign shows relative standing within the major rating category.
DAGONGAHigh Credit Quality: "A" ratings denote expectations of relatively low default risk. The capacity for payment of financial commitments is considered sufficient. However, this capacity may be more vulnerable than those of the higher ratings to adverse business or economic conditions due to any foreseeable event.

Glossary

ADVT: Average Daily Volume of shares Traded

Annual Return: Dividends Paid In a 12-Month Period/Price at the Beginning of the Period + Capital Gain or Loss over 1 Year/Price 1 Year Ago (%)

Current Ratio: Current Assets/Current Liabiliites (times)

Debt/Equity: Net Debt/Net Assets %

Dividend Yield: Dividend Per Share/Share Price (%)

EBIT Margin : Earnings Before Interest and Tax/Revenue (%)

Earnings Yield: Earnings Per Share/Share Price (%)

Income during the n years (3/2/1): Dividends received during the Period

Moving Average Price (n periods): Sum of Prices for each Period/Number of Periods

PCP: Previous Corresponding Period

PV1000: Present value of 1000 invested 1 year/'n' years ago

Price Close/Moving Avg Price: Latest Price/Moving Average Price

Price/Earnings: Share Price/Earnings Per Share (times)

Price/NTA: Closing Share Price/Net Tangible Assets Per Share (times)

Price/Sales: Share Price/Sales Per Share (times)

Relative Price Change [RPC]: Relative price change is price change of stock with respect to Benchmark Index

Relative Strength (6 Months): Price close today/Price close 6 months ago, then ranked by percentile within the entire market.

Return on Assets: Net Profit/Total Assets (%)

Return on Equity (Shareholders' Funds): Net Profit/Net Assets (%)

TSR: Total Shareholder Returns is expressed as an annualized rate of return for shareholders after allowing for capital appreciation and dividend

Total Liabilities/Total Assets: Total Liabilities/Total Assets

Turnover Rate: value of annual trading volume as a percentage of market capitalisation

Volume Weighted Average Price (VWAP): The Volume Weighted Average Price (VWAP) is the summation of turnover divided by total volume in the same period.

Created by www.buysellsignals.com