(IDEX Online) - Alrosa blamed a Q1 plunge in profits of 87 per cent on revaluation of its foreign currency debt, and, to a lesser extent, COVID-19.
The Russian state-owned miner reported a good start to the year and said prices were recovering, until the coronavirus pandemic in mid-February.
Net profit for the first three months of 2020 were RUB 3.1bn ($45m), down from RUB 11.7bn ($170m) in Q4 2019 and RUB 24.1bn ($350m) in Q1 2019.
The company said it was prepared for the impact of coronavirus to continue into Q2 and beyond, but sounded a note of optimism over a bounce-back of sales in China and other Asian markets.
Earnings before interest, tax, depreciation and amortisation (EBITDA) fell four per cent to RUB 30bn ($440m) on lower Q1 sales volumes.
Diamond sales for Q1 amounted to 9.4 m carats (down 1% q-o-q) and total revenue was $904m (down 11% y-o-y).
"In March, the situation escalated, with sales dropping considerably as the restrictions were being introduced around the world," said chief financial officer Alexey Philippovskiy in a statement.
"In April, the company began to provide its long- term customers with unprecedentedly flexible terms, allowing them to completely suspend purchases and transferring the contractual volumes to subsequent months.
"Today, we see diamond jewellery sales bouncing back in China and other Asian markets, which is expected to drive diamond demand up as soon as July-August."
He referred to an earlier announcement that the production target for 2020 had been cut from 34.2m carats to 28-31m carats.
Pic courtsey Alrosa