CEO says ALROSA may pay 100% of free cash flow in 2020 divs

MOSCOW, Nov 12 (PRIME) -- The management of Russian diamond mining giant ALROSA does not rule out paying 100% of its free cash flow in dividends for 2020, CEO Sergei Ivanov said on Thursday in a conference call.

ALROSA’s dividend policy is flexible – the company may allocate 50–70% of free cash flow to dividends if its ratio of net debt to earnings before interest, taxes, depreciation, and amortization (EBITDA) stays within 1–1.5x, he said.

“Let’s see what will happen. Our current forecast is that the indicator will remain within 1–1.1x. But if December sales are good, it may be even below 1x, and in this case, we may pay 70–100% of free cash flow (in dividends),” he said, adding that the shareholders will decide on dividends for 2020 in April 2021.

Previously, the company paid 6.47 rubles per share, or 100% of free cash flow, in full dividends for 2019, but decided against paying dividends for January–June 2020 due to a low free cash flow in the period.

The Russian government owns a 33.03% stake in ALROSA, the republic of Yakutia has 25% plus one share, districts of the republic own 8%, the free float is about 34%.

(76.2075 rubles – U.S. $1)

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