MOSCOW – Alrosa, the world's largest producer of rough diamonds in carat terms, said on Friday its second-quarter net profit rose about 1 percent year on year as higher prices helped offset a sales drop.
State-controlled Alrosa and Anglo American's De Beers produce about half of the world's rough diamonds. In 2017, Alrosa was hit by a shutdown at its Siberian underground Mir mine, which had accounted for 9% of its annual diamond output before it was partly flooded in August 2017.
AdvertisementThe company said on Friday its net income in April-June grew to 25.4-billion roubles ($379.3-million) from 25.2-billion a year earlier, while core profit, or EBITDA, rose 10% to 41.3-billion roubles.
Revenue was up 2% year-on-year to 72.2-billion roubles thanks to an increase in average selling prices. Sales volumes dropped 11% on the back of an 18% decrease in production.
AdvertisementThe company said on Friday its 2018 sales forecast was 39-million to 40-million carats, in line with its previous guidance. Alrosa said previously it expected 2018 production of 36.6-million carats with sales of about 40-million carats - higher than production due to sales from the stockpile in early 2018.
Free cash flow expanded 33% year-on-year in the second quarter and net debt fell 83% from last year.
Alrosa is currently considering ways to resume production at the Mir mine with the project's feasibility study expected to be ready in 2019.