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ALROSA Sales Slump 44% in 3Q, Production Spikes
Oct 21, 2015 8:30 AM
By Rapaport News
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RAPAPORT... ALROSA’s diamond sales fell 44 percent year on year to approximately $563 million during the third quarter of 2015, according to the miner’s preliminary trading report.
The company said that gem-quality rough diamond prices declined by 8 percent during the quarter, “in line with the slowdown in the diamond market.” Rapaport reported that ALROSA reduced prices by 8 percent to 10 percent at its September sale and kept prices basically unchanged in October. Chief executive officer Andrey Zharkov told the Russian press last week he expects prices to remain stable until the end of the year.
ALROSA reported that its gem-quality rough diamond sales achieved an average price of $182 per carat, which was in line with the average price reported a year earlier and up from $176 per carat reported in the second quarter. A shift in production to higher grade deposits during the year may explain the firm average price achieved.
The volume of gem-quality sales fell to 3 million carats, down 43 percent from 5.3 million carats reported for the third quarter of 2014, while industrial diamond sales volume dropped 17 percent to 1.9 million carats.
Rapaport Research based on ALROSA reports.
Record Production
Despite the decline in sales, ALROSA increased its production by 20 percent to 11.635 million carats during the third quarter, which was its highest quarterly output in at least seven years since production data was officially made available, according to Rapaport records (see graph below). Ore recovery increased 4 percent to 13.487 million tonnes, while the average grade of production rose to 0.86 carats per tonne (cpt) from 0.75 cpt a year earlier.
During the first nine months of the year, production rose 16 percent to 29.648 million carats, while the company sold 23 million carats during the same period.
ALROSA CFO Igor Kulichik said during a September 1 conference call that the company would prefer to raise inventory rather than lower output as the cost of adjusting operations is high. He reported at the time that ALROSA raised its inventory from 14 million to of 17 million carats during the first half of the year.
The company confirmed its stated full year production guidance of 38 million carats.
Rapaport Research based on ALROSA reports.
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Tags:
3Q15, Alrosa, production results, Rapaport News, Russia
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