On Tuesday, the international credit rating Standard & Poor's agency upgraded the long-term credit rating of Russian diamond mining company "ALROSA" (PAO) from "BB-" to "BB", while affirming its short-term rating at 'B'. Forecast on ratings - "positive".
In addition, Standard & Poor's upgraded the rating of a Eurobond issue of "ALROSA" worth $ 1 billion. To "BB-" to "BB".
According to the report the agency, this rating action reflects the opinion of Standard & Poor's on the improvement of operational efficiency ALROSA due to the weakening of the ruble, which led to increased profitability and increased cash flow generation of the company.
In the 1st quarter of 2016 the company generated a record high, EBITDA of 60 billion rubles. (about $ 800 million.) based Standard & Poor's adjustments compared to 47 billion rubles. in the 1st quarter of 2015, and the EBITDA margin reached 59%. Cost diamond production was low and per one carat was only 1900 rubles. the extraction of open pit and 2,400 rubles. the extraction in a closed underground mines (30 and 38 dollars., respectively, using the spot rate). According to Standard & Poor's, the generation of positive results indicative of a higher than previously expected, the operating efficiency of ALROSA. The rating agency believes that the company will be showcasing her in the future, in connection with which it raises the profile of evaluation of business risks with a "weak" to "acceptable".
According to Standard & Poor's opinion, the positive impact on the business risk profile of ALROSA continues to have its very strong market position in the global market and large reserves of diamonds.
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Rockwell Diamonds reported a number of steps in the revision of its strategy aimed at reducing costs and improving cash flows. Also, these measures involve the closure of the company's head office in Johannesburg.
Rockwell said it will transfer from Johannesburg key senior executives to its operations in the central area of the Orange River (Middle Orange River, MOR) in South Africa, so the company will be able to save $ 484,097 per year.
By February 2016 Rockwell also plans to stop production at the project Saksendrift (Saxendrift) on the south bank of the Orange River.
Other plans include the simplification of operational reporting structures, which is why mine management will be directly responsible for production operations, and will begin to report to the chief executive officer, who will be personally present on the project.
"The current level of diamond production, quality and processing volumes breeds continue to be a problem for of Rockwell, - said in a statement -. As a result, we found it difficult to achieve financial viability, growth and profitability, which directly affect the requirements for the human capital of the company and sustainability operations. "
The company also decided to restructure the labor force for the entire company, and has given all employees notice of an impending reduction.
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