Diamond giant Alrosa offices raided – report

According to media reports the offices of Alrosa (MCX:ALRS), the world's top diamond producer by output, were raided by Russian security services on Thursday as part of an investigation into asset sales the company undertook in 2011 and 2013.

Reuters reports Russia's Federal Security Service or FSB raided the Moscow offices of Alrosa in relation to Alrosa's divestment of a number of assets including a 51% stake in Timir iron ore project to Evraz and the ultimately unsuccessful negotiations with Russian oil giant Rosneft to offload the diamond miner's gas fields.

Alrosa, worth $12 billion on the Moscow Stock Exchange, posted a fourfold increase in total profit to $2.31 billion (133.5 billion roubles) for 2016.

Moscow sold a 10.9% stake in the company last year raising $813 million for state coffers

The miner, majority-owned by the Russian government and the far eastern province of Yakutia where most of its operations are based, said profit attributable to shareholders totalled $2.25 billion (131.39bn roubles) last year, versus $530K (30.67 million roubles) in 2015, thanks to a global recovery in diamond prices. Moscow sold a 10.9% stake in the company last year raising $813 million for state coffers.

"2016 was a year of active recovery in the diamond market following the decline of 2015,” Alrosa's chief financial officer Igor Kulichik said in the statement. "The company managed to deliver record-high financial performance and generate net cash flow sufficient to repay short-term and medium-term liabilities and pay out dividends to shareholders,"

Earnings before interest, tax, depreciation and amortization, however, fell 30% in the fourth quarter, becoming the second-worst quarter in the Alrosa’s history due mostly to a weakened demand for gems.

The diamond miner, which is planning to increase production by 6% to 39.2 million carats this year, appointed last week Sergei Ivanov, the son of a close advisor to Russian president Vladimir Putin, as its new president.

Hat tip: ID