Alrosa Sees Continued Improvement in Sales

RAPAPORT... Alrosa's sales rose for a second consecutive month in September as manufacturers returned to buying following a lengthy period of inactivity.Revenue from diamonds grew 30% year on year to $336 million, with rough sales up 28% to $328.2 million, the Russian miner reported Friday. Polished sales increased to $7.8 million from $2.2 million, reflecting the company's acquisition of diamond cutter Kristall last year."Our September sales demonstrate a continuation of diamond-demand recovery that started in August, as cutters and retailers gradually normalize their stock levels," said Alrosa deputy CEO Evgeny Agureev. "In the key end-user markets in the US and China, jewelry stores begin to regain customers, a trend well supported by a rapid development of online trade."Alrosa's sales hit unprecedented lows in April to July as the coronavirus pandemic froze the industry. However, the company's performance began to improve in August as it reduced prices to spur demand and midstream players looked to fill shortages that had emerged during the shutdown. Manufacturers sought goods in September ahead of the November Diwali festival, which usually closes the Indian cutting sector for a few weeks and occurs shortly before the important US holiday season.In addition, the company recently introduced an upgraded version of its "video viewer" service, which enables customers to inspect diamonds remotely with the help of Alrosa representatives. This allowed clients to view goods without traveling to Moscow during the pandemic.However, with the Covid-19 situation worsening in several countries, it is too early to speak of a steady recovery in diamond demand until results from the upcoming holiday season are available, Agureev cautioned.For the first nine months of 2020, Alrosa's total diamond sales dropped 35% year on year to $1.58 billion. Rough sales slumped 37% to $1.51 billion, outweighing a 94% jump in polished revenue to $71.4 million.Image: Rough-diamond sorting. (Alrosa)