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Alrosa’s Revenue Falters on Weak Prices

Miner sold increased proportion of lower-value stones.
Apr 17, 2019 8:01 AM   By Rapaport News
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RAPAPORT... Alrosa’s sales fell in the first quarter amid lower rough prices and a larger proportion of small diamonds.

Revenue from rough stones slid 37% year on year to $988 million for the three months ending March 31, the Russia-based miner said Wednesday. Sales volume declined 21% to 10.6 million carats, while the average price decreased 20% to $123 per carat for gem-quality diamonds. Prices dropped 3.1% versus the fourth quarter of 2018 on a like-for-like basis, it added.

“Average realized prices of rough, gem-quality diamonds decreased…due to a larger share of small-size diamonds and lower prices mostly for medium-size diamonds,” Alrosa explained.

Polished-diamond sales plummeted 31% to $16.4 million for the period.

Production grew 5% to 7.8 million carats during the quarter as the miner increased ore processing at its Botuobinskaya pipe and ramped up the Udachny underground mine. Alrosa also raised output at its Severalmaz division, as it processed higher-grade ore. In addition, it launched operations at the Verkhne-Munskoye deposit. The company’s inventory increased 16% to 14.3 million carats as of March 31, compared with a year earlier.

The miner has forecast a 4% increase in production to 38 million carats for 2019, compared with 36.7 million carats last year.

Image: The Botuobinskaya pipe. (Alrosa)
Tags: Alrosa, Botuobinskaya pipe, first quarter, Rapaport News, Severalmaz, Udachny underground mine, Verkhne-Munskoye
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