Security raids and abrupt exit of chief fail to derail Alrosa

(The Financial Times) - The abrupt departure of its chief executive, the appointment of the son of one of Russian president Vladimir Putin’s closest aides to replace him and a raid this month by the security services. That would be enough to worry even the boldest investor. Yet the corporate success story of Alrosa does not look like it is fading. Only last month, the world’s biggest diamond producer by volume reported a fourfold increase in profits and a 41 per cent surge in year-on-year revenue. The strong results of the Russian state-run company have been helped by last year’s global recovery in diamond prices following a decline in 2015 as the group generated net cash flow to pay liabilities and dividends. The upbeat results show that a company based in Mirny in the remote far eastern region of Yakutia, which became Russia’s diamond capital after Soviet geologists discovered massive deposits there in 1949, can thrive in the modern market place. Of all the state-run monopolies left over from the Soviet Union, Alrosa is considered one of the successes.