Earnings Report /
Russia

Alrosa: December sales – Revenue lower amid depleted inventories, robust demand; Neutral

  • ALROSA reported its December sales results at $254mn, which contributed to a strong end to 2021

  • The 51% y/y decrease in ALROSA’s sales should be also weighted against the high base of December 2020

  • We continue to see positive momentum in the diamond industry

Boris Krasnozhenov
Boris Krasnozhenov

Head of Research (Managing Director)

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Yulia Tolstykh
Yulia Tolstykh

Analyst, Metals & Mining

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Alfa
13 January 2022
Published byAlfa

ALROSA (ALRS RX, O/W, RUB 159.1/share) reported its December sales results at $254 mn, which contributed to a strong end to 2021, with 2021 sales increasing 49% y/y and 25% above pre-pandemic 2019. The 24% m/m decline in ALROSA’s sales came as no surprise after De Beers’ preliminary report for the 10th cycle revealed a corresponding decline in revenues amid scarce supplies. De Beers 10th cycle sales reached $332 mn vs $428 mn in the previous cycle. The 51% y/y decrease in ALROSA’s sales should be also weighted against the high base of December 2020 when sales volumes were drawn from inventories. On a separate note, a certain part of the December sales was moved to January, as December’s trading session was shifted towards the end of the month.

We continue to see positive momentum in the diamond industry. Holiday season sales demonstrate positive dynamics. Jewelry was the US’s best-performing retail category in December compared to pre-pandemic levels, according to Mastercard SpendingPulse. The segment’s sales revenue increased 27% vs 2019. Online jewelry sales in the US during the pre-season sales in November-December were robust, with revenues in the jewelry segment coming 2.2 times higher than pre-season levels. In the meantime, polished exports from India saw a spike in pre-holiday shipments with the value of exports increasing amid robust demand. An increase was also evident in US polished imports. We reiterate our bullish call on ALROSA.