Page 12 - bneMag bne_December 2020_20201201

12 I Companies & Markets bne December 2020
Russian diamond major Alrosa back in black
in 3Q20
IntelliNews Pro
Russian diamond major Alrosa returned to profitability in 3Q20 under IFRS, with adjusted net income under IFRS up by 29% year on year to RUB16bn ($0.2bn), beating expectations.
As reported by bne IntelliNews, the company has surprised on the upside with strong sales since August, after previously struggling on the weak market and cancelling dividends for 1H20.
The diamond miner also has recently improved its outlook on 4Q20, and further recovery in sales was seen in September and October.
In 3Q20 revenues were up by 9% y/y to RUB50bn, notably soaring 5-fold quarter on quarter, due to demand recovery following a significant drop in diamond supply in 2Q20 amid the coronavirus (COVID-19) pandemic, BCS Global Markets commented on November 13, while maintaining a Hold recommendation on the name.
Ebitda rose by 22% y/y to RUB25.7bn and up from only RUB117mn in 2Q20 on the back of a sales rebound and cost control initiatives by the company.
Alrosa's free cash flow (FCF) grew to RUB22.6bn compared with a negative RUB30bn in 2Q20 and up from RUB20.1bn y/y.
Notably, deputy CEO Alexey Filipovsky during a conference call for the 3Q20 IFRS results said that the company could pay 75-100% in FCF for 2020 in December. A 100% payout could increase the dividend yield to 7%, BCS GM estimates, seeing the news as positive and expecting a recovery of sales to 2019 level in 2021 to be positive for financials.
The CEO of the company, Sergey Ivanov, also previously noted that the potential purchases for the state reserves Gokhran will support the company in the adverse conditions on the diamond market.
VW boss confirms Turkey factory plans scrapped in favour of heavy investment in Slovakia
bne IntelIiNews
VW Group boss Herbert Diess has said the automaker
is to invest heavily in its plant in Bratislava, Slovakia, as opposed to opening a brand new factory in Turkey, Carscoops reported on November 10, citing remarks made to Automobilwoche in an interview.
VW has had to reassess its capacity requirements because
of the coronavirus pandemic, and ultimately decided that it doesn’t need an additional plant. However, following Turkey’s incursion into northeast Syria late last year, VW was anyway under pressure from unions and human rights groups not to choose Turkey as the location for the proposed factory.
The German carmaking giant appears set to build a new assembly
www.bne.eu
line, as well as a new body shop as part of its expansion in Slovakia, where it builds most of its premium SUVs.
The VW Touareg, Audi Q7, Audi Q8 and Porsche Cayenne are all built in Bratislava, alongside the VW Up, Skoda Citigo and SEAT Mii minicars, as well as bodies for the Bentley Bentayga.
Initially, VW wanted to open a plant in Turkey near Izmir to build the next-generation VW Passat and Skoda Superb from 2022. But both models will now be built in Slovakia.
“It remains a disadvantage that we cannot better develop the market [adding to Turkish sales] there via a plant in Turkey,” Diess said during the interview.