Page 117 - RusRPTDec19

RusHydro​ has reached an agreement with Tashir group on the sale of MEK (International Energy Corporation), ​the owner and operator of the cascade of Sevano-Ryadzyanskie hydro assets in Armenia. RusHydro announced its intention to sell the asset as early as 2017. In accordance with the deal, the buyer – Tashir Group – would accept the loans and liabilities of the asset to its creditors. The equity value of the deal is set at RUB173mn, on par with RusHydro’s acquisition price back in 2011.
9.2.11 ​Metallurgy & mining corporate news
● Gold & Diamonds
Russia's largest gold producer ​Polyus Gold​ reported revenue growth of 29% year-on-year under IFRS in 3Q19 to $1.1bn, ​due to 4% y/y increase in sales and 23% y/y surge in gold prices. The company's Ebitda earnings in the reporting quarter gained 31% y/y to $0.7bn, and net income 23% y/y to $459mn, beating consensus expectations by 2% and 7%, respectively, both on strongeroperatingperformance. Asreportedby​bneIntelliNews,​ PolyusGold, owned by tycoon and senator Suleiman Kerimov, said in September it will ​use the additional revenues from rising gold prices to deleverage and cut debt​. Following the 3Q19 report, the company reiterated the 2019 production guidance at 2.8mn ounces. BCS Global Markets sees the news as slightly positive and maintaining a Hold recommendation for Polyus shares with a target price of $62 per global depository receipt ($62/GDR). The company also maintained the capital expenditure almost flat q/q at $157mn in 3Q19 and decreased it by 7% y/y to $543mn in 9M19 overall, in line with the earlier downwards revision of capex to in 2019 to $650-700mn from $725mn.
Russian uncut diamond monopoly ​Alrosa​ reported strong 3Q19 IFRS results​, containing the net income decline at only 3% year-on-year to RUB11.7bn ($183mn), beating the expectations of analysts by over 40%. As reported by ​bne IntelliNews,​ Alrosa, a one-time investors' darling, is ​having a terrible year ​with diamond sales sliding to a two and half year low and the ​CEO recently warning the outlook will remain poor​. But in 3Q19 the revenue decline of 20% q/q to RUB46bn and Ebitda decline of 16% q/q to RUB21bn has both exceeded the expectations of the analysts, with lower sales volumes partially offset by an increase in prices. In a separate report Alrosa said that October total diamond sales amounted to $264.4mn, going up by 2% m/m and 9% y/y. BCS Global Markets commented on November 8 “Alrosa’s diamond sales seems to have stabilized and demonstrated three consecutive months of m/m growth in October and first y/y growth in total sales in nine months.
117​ RUSSIA Country Report​ December 2019 ​ ​www.intellinews.com