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RAPAPORT... ALROSA reported that sales rose 6.4 percent year on year to $1.2 billion (RUB 39.6 billion) for the first quarter that ended on March 31, and as filed under International Financial Reporting Standards (IFRS). ALROSA's cost of sales jumped 12.1 percent to $625 million (RUB 20.1 billion). Profit plunged 59 percent to $162 million (RUB 5.2 billion). Revenue from the sale of diamonds that were exported rose 11.2 percent to $936 million (RUB 30.1 billion) and domestic diamond sales fell 18.5 percent to $180 million (RUB 5.8 billion). Revenue from diamonds for resale inched up 2.9 percent to $8.9 million (RUB 287 million). Meanwhile, revenue from ''other'' businesses and construction improved slightly, but decreased for the categories of social infrastructure, transportation and trading. Of the top destinations for ALROSA's diamonds during the first quarter, slightly more than half of all diamond sales were made to companies in Belgium, while $289 million (RUB 9.3 billion) worth of goods were sold within the Russian Federation and $174 million (RUB 5.6 billion) worth of diamonds were sold to Indian companies. Israel-based firms purchased $87 million (RUB 2.8 billion) worth of diamonds. Inventory levels rose 1.7 percent to $1.7 billion (RUB 55.6 billion), short term debt was $1.2 billion (RUB 39.6 billion) in March compared with $1 billion (RUB 32.3 billion) in December and long term debt was $2.9 billion (RUB 92.7 billion) in March, which was up from $2.8 billion (RUB 90.4 billion) in December. ALROSA stated that the operating environment of the Russian Federation, while it is improving in terms of economic trends, continues to display certain characteristics of an emerging market, including relatively high inflation and high interest rates. The future economic direction of the Russian Federation is largely dependent upon the effectiveness of economic, financial and monetary measures undertaken by the government, together with tax, legal, regulatory, and political developments. The international sovereign debt crisis, stock market volatility and other risks could have a negative effect on the ability of ALROSA to obtain new financing and re-finance its existing loans at terms and conditions similar to those applied to earlier transactions, according to the firm. Nonetheless, management believes that Russia is taking all necessary measures to support the sustainability and development of its business in the current economic climate.
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