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Alrosa Profit Slumps Despite Inventory Sell-Off
May 28, 2017 5:09 AM
By Rapaport News
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RAPAPORT... Alrosa’s rough-diamond revenue declined in the first quarter
as sales shifted to lower-quality goods, the Russian miner said.
Group revenue fell 17% year on year to $1.5 billion (RUB
84.81 billion) for the three months that ended March 31, the company reported
Thursday. Sales of gem-quality rough diamonds fell 18% to $1.35 billion (RUB 76.1
billion), with the remainder of revenue coming from industrial diamonds, gas
sales and other products. Profit slid 55% to $401.4 million (RUB 22.69 billion).
Sales to Belgium, Alrosa’s largest market, dived 15% to
$764.2 million (RUB 43.19 billion), while revenue from India dropped 23% to $228.1
million (RUB 12.89 billion).
Alrosa sold a greater proportion of lower-value rough during
the period, after exceptionally high sales in the first quarter of 2016. This
was due to a selloff of higher-priced diamonds a year ago following the
downturn at the end of 2015, the company explained in a separate statement earlier
this month.
While Alrosa did offload a lot of goods this year — sales
volume for the first quarter increased 17% to 14.1 million carats — these
diamonds were generally the smaller and cheaper ones for which demand stalled at
the end of 2016 due to India’s demonetization program.
The strengthening of the Russian ruble against the US dollar
also dented Alrosa’s revenue, as the miner pays expenses in its home currency
but sells in the greenback. The ruble appreciated about 8% against the dollar
during the quarter. |
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Tags:
Alrosa, Belgium, Dollar, India, mining, Rapaport News, Rough Diamonds, rough sales, Ruble, Russia
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