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ALROSA Declares RUB 65.8 Billion 2016 Dividend

ALROSA Demonstrates Robust Financial Health with Substantial 2016 Dividend and Strengthens Corporate Governance with New Supervisory Board

PJSC ALROSA, a global leader in diamond mining and production, recently underscored its strong financial performance and unwavering commitment to shareholder value at its Annual General Meeting (AGM). Shareholders overwhelmingly approved a resolution for an impressive annual dividend payment for the year 2016, amounting to RUB 65.769 billion. This significant distribution translates to RUB 8.93 per ordinary share, each with a par value of 50 kopecks, marking a landmark year for the company’s investors.

The approved dividend figure is a direct reflection of ALROSA’s outstanding profitability in 2016. It represents a substantial 50% of the company’s net profit for the year, after accounting for profit attributable to non-controlling interests. According to the IFRS Consolidated Financial Statement, ALROSA’s net profit for 2016 reached a remarkable RUB 131.391 billion, showcasing the company’s operational efficiency and market dominance in the global diamond sector.

Significant Increase in Shareholder Returns: A Testament to ALROSA’s Success

Comparing this payout to previous years, the 2016 year-end dividend stands out dramatically. It is a staggering four times the amount ALROSA paid out in 2015, when the company distributed RUB 15.392 billion, or RUB 2.09 per ordinary share. This remarkable surge in dividend payments highlights ALROSA’s exceptional financial trajectory and its dedication to rewarding its shareholders handsomely for their investment. Such a substantial increase not only signals robust financial health but also instills greater confidence among existing and potential investors, solidifying ALROSA’s position as an attractive investment opportunity within the commodities market.

The meeting further stipulated that the dividend payment would be made to all eligible shareholders recorded as of July 20, 2017. This record date is crucial for investors, determining who qualifies for the dividend rights. The timely communication and clear guidelines regarding dividend distribution are integral to transparent corporate governance and effective investor relations, areas where ALROSA continues to demonstrate leadership.

ALROSA’s dividend policy reflects a strategy focused on maximizing shareholder value while maintaining financial stability and supporting future growth initiatives. The ability to distribute such a significant portion of its profits underscores the company’s successful management of operational costs, efficient production, and strategic navigation of the global diamond market’s complexities. This commitment to returning value to shareholders is a cornerstone of responsible corporate stewardship, enhancing the company’s reputation and long-term viability.

Strengthening Corporate Governance: The Election of a New Supervisory Board

In addition to the pivotal dividend announcement, ALROSA also made another critical disclosure: the election of a new Supervisory Board. This board is tasked with exercising general control and oversight over the Company’s operations, ensuring strategic alignment, risk management, and adherence to the highest standards of corporate governance. The composition of such a board is paramount for a company of ALROSA’s stature, given its role as a state-controlled entity and a major player in a globally significant industry.

The newly elected Supervisory Board brings together a diverse group of highly experienced professionals, including independent members, government officials, and industry experts. This blend of expertise is designed to provide comprehensive oversight and strategic guidance, reflecting ALROSA’s commitment to transparency, accountability, and effective decision-making. The presence of government representatives underscores the company’s strategic importance to the Russian Federation and the Republic of Sakha (Yakutia), while independent members ensure objective and balanced perspectives in board deliberations.

Meet the Esteemed Members of ALROSA’s New Supervisory Board:

  • Valentina Ivanovna LEMESHEVA – Member of the Supervisory Board, PJSC ALROSA (as an independent member of the Supervisory Board). Her independent perspective is vital for unbiased decision-making and robust corporate governance practices.
  • Yegor Afanasyevich BORISOV – Head of the Republic of Sakha (Yakutia). Representing the interests of the region where ALROSA’s primary operations are based, his presence ensures alignment with regional development goals.
  • Sergey Sergeevich IVANOV – President, PJSC ALROSA. As the company’s top executive, his role on the board ensures strategic execution aligns with board-approved objectives.
  • Galina Innokentievna DANCHIKOVA – State Duma Deputy of the Federal Assembly of the Russian Federation. Her involvement provides a crucial link to national legislative and policy frameworks.
  • Evgenia Vassilievna GRIGORIEVA – Minister of Property and Land Relations of the Republic of Sakha (Yakutia). Her expertise is crucial for matters concerning land use and property rights, particularly relevant for a mining company.
  • Georgy Karlovich BASHARIN – Deputy Head, Municipal Entity Mirny District of the Republic of Sakha (Yakutia). Representing local community interests, his participation ensures social responsibility and regional impact considerations are central.
  • Sergey Vasilyevich MESTNIKOV – General Director, Non-profit Organization Special Purpose Fund for Future Generations of the Sakha Republic (Yakutia). His role emphasizes ALROSA’s commitment to long-term sustainable development and future generations.
  • Anton Germanovich SILUANOV – Finance Minister of the Russian Federation. As a key government official, his presence signifies the state’s strategic interest and financial oversight in ALROSA’s operations.
  • Maria Vladimirovna GORDON – Member of the Supervisory Board, PJSC ALROSA (as an independent member of the Supervisory Board). Another independent voice contributing to robust oversight and strategic impartiality.
  • Oleg Romanovich FEDOROV – Member of the Supervisory Board, PJSC ALROSA (as an independent member of the Supervisory Board). The inclusion of multiple independent members strengthens the board’s autonomy and effectiveness.
  • Kirill Alexandrovich DMITRIEV – CEO, Russian Direct Investment Fund Managing Company LLC. His experience in investment and fund management brings a valuable financial and strategic perspective to the board.
  • Alexander Sergeevich GALUSHKA – Minister for the Development of the Russian Far East. His strategic input is vital for ALROSA’s operations within the broader economic development context of the Far East region.
  • Sergey Vladimirovich BARSUKOV – Director of Department, Ministry of Finance of the Russian Federation. His role ensures alignment with national financial policies and fiscal responsibility.
  • Alexey Olegovich CHEKUNKOV – CEO, Far East and Baikal Region Development Fund. Providing insights into regional development, investment, and infrastructure projects, crucial for ALROSA’s long-term planning.
  • Dmitry Vladimirovich KONOV – Chairman of the Management Board, PJSC SIBUR Holding (as an independent member of the Supervisory Board). His leadership experience from another major Russian enterprise, coupled with his independent status, offers invaluable external expertise.

The selection of these individuals reflects a deliberate strategy to assemble a board with comprehensive expertise across various domains, including finance, regional governance, national policy, and independent corporate oversight. This diverse skill set is expected to significantly enhance ALROSA’s strategic planning, risk management capabilities, and overall corporate performance.

The leadership structure of the newly formed Supervisory Board will be finalized at its inaugural meeting, where the Chairman of the Supervisory Board and members of the various committees will be elected. This step will complete the governance framework and enable the board to fully commence its crucial duties of guiding ALROSA towards continued success and sustainable growth in the dynamic global diamond market.

ALROSA’s Position and Future Outlook in the Global Diamond Market

ALROSA’s decisions regarding its dividend policy and the constitution of its Supervisory Board send strong signals to the global market. The generous dividend payout reinforces its image as a financially sound company capable of generating significant returns for its shareholders. This is particularly important in an industry that can be sensitive to global economic shifts and consumer trends.

Moreover, the formation of a robust and diverse Supervisory Board underscores ALROSA’s commitment to best practices in corporate governance. Effective governance is not merely a regulatory requirement; it is a critical factor in fostering investor confidence, mitigating risks, and ensuring the long-term sustainability of a major enterprise. By bringing together government representatives, independent experts, and seasoned business leaders, ALROSA aims to navigate future challenges and capitalize on opportunities with enhanced strategic foresight and operational integrity.

As a leading player in the world diamond industry, ALROSA’s performance and governance structures have far-reaching implications. Its ability to maintain strong profitability, as evidenced by the 2016 financial results and dividend payout, directly impacts regional economies in Russia, particularly in the Republic of Sakha (Yakutia), and contributes significantly to the global supply chain of rough diamonds. The strategic guidance from the new Supervisory Board will be instrumental in ensuring ALROSA continues to innovate, operate responsibly, and uphold its leadership position in the years to come.

In conclusion, the recent Annual General Meeting of PJSC ALROSA marked a pivotal moment, reaffirming the company’s financial strength through a record dividend payout and fortifying its corporate governance framework with an expertly chosen Supervisory Board. These strategic moves not only benefit shareholders and stakeholders but also reinforce ALROSA’s standing as a resilient, well-managed, and forward-looking leader in the global diamond industry.