ALROSA, the sale of which was significantly affected by the coronavirus, has decided not to pay dividends for the first half. The company notes that free cash flow for the period was negative. According to the company’s forecasts, the recovery in buying activity of cutters will begin in September in anticipation of the seasonal rise in demand for polished diamonds in November—January.ALROSA will pay dividends for the first half, the company said, citing Deputy General Director Alexei Filippovsky. He stated the absence of conditions for the payment of dividends in connection shown negative free cash flow of 8.3 billion rubles According to the IFRS report, the company’s EBITDA for the half year declined by 47%, to 30.1 billion rubles year-on-year net profit fell 91%, to 3.3 billion rubles, revenue by 43% to 73.1 billion rubles, the sales Decline amounted to 47%, to 10.1 billion rubles According to Alexey Filippovsky, shown in the second quarter results are expected to be low. ALROSA, as with other mining companies, struggling with a glut in the market. Against the backdrop of high stocks from the diamond company gave them the opportunity to redeem previously contracted work for the reserves.In June, the demand for jewelry in the U.S. were 1.9% higher than the figure of last year, the growth in consumer activity in China. “We are also seeing the first signs of recovery in imports of diamonds to India as export growth of cut stones. While this growth is satisfied by domestic supplies of cutters, but, according to our estimates, the recovery in buying activity of cutters will begin in September in anticipation of the seasonal rise in demand for polished diamonds in November—January. Of course, if this scenario is realized, the demand will in any case be still careful. In addition, we cannot exclude the possibility of the spread of the second wave of the virus that can make their adjustments,”— said Alexey philippovskiy.Because of the massive drop in demand, ALROSA has suspended production at two low-margin deposits of the “Aykhal” and “dawn”, the staff which was partially removed in a simple. In addition, a simple output of the enterprise the cutting and polishing Department of the company. The government discussed support options of the company. The Ministry of Finance supports a ransom of diamonds to Gokhran in the amount of $0.5 billion to $1 billion at the request of Yakutia (a major shareholder of ALROSA). In addition, the Vice Prime Minister Yuri Trutnev has proposed to consider the possibility of diversification of company’s activity due to the extraction of other precious metals, including gold. The final decision is made.Eugene Zainullin
