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ALROSA Turns a Profit in 3Q
Nov 21, 2016 4:09 AM
By Rapaport News
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RAPAPORT... ALROSA swung to a profit in the third quarter driven by
significantly higher rough diamond demand from last year.
Total revenue from diamond sales climbed 83 percent to $982.2
million (RUB 63.02 billion), boosted by a 91 percent rise in revenue to Belgium
and an 81 percent increase to India. Cost controls helped rein in production
expenses and aided the company’s return to the black in the three months that
ended September 30, the Russian-based miner said.
“The recovering demand for diamonds has driven up sales volumes and reduced the remaining diamond inventories,” said chief executive officer Andrey Zharkov (pictured). “The threefold growth in net cash flow and net profit creates enough liquidity to increase dividend payments and early debt repayment.”
ALROSA’s inventories declined 7 percent to $831.5 million between December 31 and September 30.
Inventories increased by 8 million carats in 2015 as diamond manufacturers bought less rough in the second half to enable them to work down polished stockpiles. They resumed rough buying this year after polished inventory levels normalized aided by lower manufacturing and steady holiday sales.
Sales to Belgium advanced to $452.8 million and revenue from
India climbed to $172.5 million. Profit came in at $414 million compared with a
loss of $236.6 million a year ago. Group revenue jumped 70 percent to $1.07
billion.
ALROSA’s results reflect a recovery in the global demand for
rough diamonds, and are in line with De Beers sales from nine sights in 2016 increasing
34 percent from a year earlier.
ALROSA’s sales grew 48 percent to $3.98 billion in the first
nine months of the year, while profit more than tripled to $1.82 billion from
$501.1 million a year ago.
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Tags:
Alrosa, andrey zharkov, mining, Rapaport News, rough demand, Rough Diamonds, rough sales, Russia
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