Page 120 - RusRPTJul20

22% equity stake in Petropavlovsk and convertible bonds worth an additional 6% in early February (see our ​comment​ of 6 February) and has since then expressed its confidence in Petropavlovsk’s POX facility as a source of future competitive advantage in the gold mining industry UGC is a private company with assets located in the Krasnoyarsk and Chelyabinsk regions and the Khakasia Republic. In 2020, the company planned to increase production to approximately 580koz of gold (18t), according to ​Kommersant,​ thanks to several brownfield expansion projects. Such a merger would create the third largest publically traded Russian gold producer, with a combined output of 1.1mnoz its own mines and some 200koz of gold from third party concentrate processed at POX (vs. 1.6mnoz for Polymetal and 2.8mnoz for Polyus), we calculate.
The net profit of Russian diamond mining giant ALROSA fell by 87.2% ​on the year to 3.1 billion rubles in January–March, as calculated under International Financial Reporting Standards (IFRS), the company said in a report on June 6. Revenue decreased by 11% to 62.7 billion rubles. Earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased 4% to 30 billion rubles.
Alrosa​'s rough diamond sales of $36mn in May were the lowest May sales since 2009 ​(similar to April). The company reiterated its flexibility over June sales (allowing 100% deferrals). At the same time, management pushed back expectations of a resumption in rough diamond buying from the beginning of 3Q20 to mid-3Q20 (compared with the previous sales announcement in May).
Russian diamond major ​Alrosa​ could be included in the list of companies most affected by the coronavirus (COVID-19) epidemic ​drafted by the Finance Ministry. Previously, at the end of May Alrosa asked the ministry to include the extraction of diamonds and other precious stones in the list of most affected industries. Companies from the list of the most affected sectors can count on deferrals of taxes and insurance premiums, as well as soft loans for working capital replenishment, BCS Global Markets reminded on June 10. The news is slightly positive for Alrosa sentiment should the proposal be accepted, as it will allow the company to access a range of benefits if necessary, increasing the company’s financial stability, BCS GM analysts believe. As reported by ​bne IntelliNews,​ Alrosa managed to ​post net profit in 1Q20​ despite the ​slump in diamond sales​ that followed its ​rebound in the end of 2019​.
120​ RUSSIA Country Report​ July 2020 ​ ​www.intellinews.com