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New CEO of Russia's Alrosa committed to diamond miner's strategy
March 16, 2017 / 6:28 PM / in 9 months

New CEO of Russia's Alrosa committed to diamond miner's strategy

MOSCOW, March 16 (Reuters) - The new chief executive of diamond miner Alrosa said on Thursday he would remain committed to the Russian state-controlled company’s strategy, which has focused on mining, selling non-core assets and increasing production organically.

Russia appointed Sergey Ivanov Jr, son of the former head of the Kremlin administration, as the new head of the world’s largest producer of rough diamonds this month, prompting some analysts to ask whether he would start diversifying into diamond polishing or other commodities.

Alrosa and Anglo American’s De Beers unit together produce about half the world’s rough diamonds.

“I would like to assure you that I am committed to this strategy and intend to make every effort to deliver it,” Ivanov told a conference call with analysts on Thursday, organised to discuss Alrosa’s 2016 financial results.

Ivanov, 36, had served as a senior vice-president of Russia’s largest lender Sberbank since April 2016 and headed insurer SOGAZ before that.

Earlier Alrosa reported a fourfold increase in its 2016 net profit to 133.5 billion roubles ($2.3 billion) thanks to higher sales and a weaker rouble.

Its revenue jumped 41 percent year-on-year to 317.1 billion roubles with earnings before interest, taxation, depreciation and amortisation (EBITDA) up 49 percent to 176.4 billion roubles.

Igor Kulichik, Alrosa’s Chief Financial Officer, told the call that the group had cut its diamond stockpile by 3 million carats to 19 million carats worth $1.8 billion in 2016 and does not plan to reduce it further in 2017.

The company plans to produce and sell 39 million carats of diamonds this year, he added. Its 2017 capital expenditure is expected at 36.5 billion roubles. ($1 = 57.9725 roubles) (Reporting by Diana Asonova; Writing by Polina Devitt; Editing by Alexander Smith)

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