Alrosa Profit Bounces Back

RAPAPORT... Alrosa saw a sharp rebound in profit in the first quarter as the mining company capitalized on a strong recovery in the diamond market.Net profit soared to RUB 24.02 billion ($325.9 million) from RUB 3.06 billion ($41.5 million) a year earlier, the Russian miner reported Tuesday. Revenue jumped 44% year on year to RUB 89.31 billion ($1.21 billion). Strong retail demand in the US and China spurred the market during the period ending March 31, with manufacturers showing appetite for rough amid low midstream inventories and reduced supply from miners, Alrosa explained. By the end of the quarter, rough prices recovered to levels that had been visible in the first quarter of 2020, the company added.Diamond sales surged 47% to RUB 85.65 billion ($1.16 billion), with other revenues coming from smaller businesses such as energy, transport and social infrastructure."The market is recovering faster than expected," said Alrosa CEO Alexey Philippovskiy. "Meanwhile, diamond supply is still 20% below the pre-Covid levels, and the production is unlikely to bounce back in the mid-term."Finance-related losses on foreign exchange fell to RUB 3.34 billion ($45.4 million) from RUB 29.26 billion ($396.8 million) a year earlier, supporting the company's bottom line. In addition, the weakening of the rouble improved Alrosa's figures, as the miner sells in US dollars but pays expenses and reports its results in the Russian currency.Alrosa maintained its 2021 production forecast of 31.5 million carats, noting that the consumer market remained positive.Image: Alrosa's Jubilee open-pit mine. (Alrosa)