Alrosa Profit Dips Amid Shift to Smaller Diamonds

RAPAPORT... Alrosa's profit decreased in the first quarter as its sales mix shifted to lower-value goods. Net profit fell 27% year on year to RUB 24.1 billion ($371.6 million) forthe period, the miner said last week. Revenue plummeted 27% to RUB 70.49 billion ($1.09 billion), while the average price forgem-quality diamonds dropped 20% to $123 per carat. Rough-diamond sales decreased 37% to $988 million, as smaller stones constituted a larger proportion of its sales. Sales volume declined 21% to 10.6 million carats. Alrosa also receives revenue from polished diamonds, transportation, real estate, and other business lines. "In the first quarter, the diamond market performed weakerthan usual for that part of the year, mainly due to lower jewelry sales duringthe Christmas season," Alrosa said. Sales were higher in the first quarter of 2018, as customers restocked following a long slowdown during which they had limited their purchases, the minernoted. Production rose 5% to 7.8 million carats during the quarter, as the miner increased ore processing at its Botuobinskaya pipe and ramped up theUdachny underground mine. Alrosa also launched operations at theVerkhne-Munskoye deposit, and achieved higher ore grades at its Severalmaz division, it said. The company's inventory increased 16% to 14.3 million caratsas of March 31, compared with a year earlier. Image: Rough diamonds. (Alrosa)