Best friends are not valued today. Alrosa dividends are a mirror of the economy. – 11 July 2020

In total, in the first six months of 2020, sales of rough and polished diamonds by ALROSA in value terms amounted to $ 991.1 million, while the total value of rough diamonds sold in January-June amounted to $ 955.3 million, polished diamonds – $ 35.8 million.

What does it mean?

In the second quarter, sales practically stopped, making up no more than 10% of all sales for the first half of the year!

Alrosa Sales

Lack of demand for luxury goods is a bad sign, a reflection of the state of the economy. People are afraid of losing their jobs, avoid big purchases, save on expenses.

But there are still positive expectations for the second half of the year, as well as the forecast that dividends for the first half of the year will be paid.

Dividend forecast

In the relatively successful first quarter, if the company had distributed dividends, the forecast for payments was 2.96 rubles per share.

Having made some assumptions – changes in working capital, other income and expenses, EBITDA margin at the level of the first quarter are not predicted, as well as capital investments, we can assume that it is possible to receive 2.87 rubles per share if the company decides accordingly.

With the current share price of 64 rubles, the net dividend yield will be 3.9% for the half year. If we assume that the situation will improve in the second half of the year and the company will earn at least the same amount, then the annual yield is possible at the level of 8% per annum.

Not bad at a time when diamonds are not the best friends!

All That Glitters Is Not Gold

All That Glitters Is Not Gold

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