Standard & Poor’s Ratings Services announced on Tuesday that it has upgraded the long-term credit rating of diamond miner Alrosa from “BB-” to “BB”, confirming the company’s short-term rating at ‘B’. The outlook for both ratings is “Positive”.
According to Standard & Poor’s, quoted by Rough & Polished, “the rating action reflects agency’s view that ALROSA will sustain very low debt leverage and positive free operating cash flow (FOCF) generation over the next two years despite potential pressure on rough diamond prices and inherent industry volatility”.
Standard & Poor’s added: “We also think that ALROSA’s leading position on the global rough diamonds market (29% share), its relatively low cost position, large high-grade reserves with long-term operations life, visible and manageable investment project base provide a stronger-than-anticipated buffer against lower cash flow volatility amid constrained market conditions and during bottom-of-the-cycle periods […] we have positively reassessed the company’s financial risk profile to modest from intermediate”.
