First-half revenue rose 8 percent for Alrosa and net profit climbed 19 percent as the company sold fewer rough diamonds but had a better sales mix and sold them at higher prices.
Moscow—Alrosa sold fewer diamonds but at higher prices in the first six months of the year, ending the period with year-over-year increases in sales and net profit.

The Moscow-based diamond miner reported late last week that second quarter revenue totaled 72.2 billion rubles ($1.06 billion), up 2 percent year-over-year but a 25 percent drop from the first quarter.

Second quarter net profit totaled 25.4 million rubles, up 1 percent from the second quarter 2017 but down 32 percent from 32.9 billion rubles in the first quarter.

First-half revenue totaled 168.2 billion rubles, up 8 percent from 155.6 billion rubles in the prior-year period.

Net profit climbed 19 percent, from 48.9 billion rubles to 58.3 billion rubles on the back of growing EBITDA bolstered by higher diamond prices, strict cost controls and a weaker ruble, the company said.

The year-over-year increases in sales and net profit came despite the fact that the volume of carats sold by Alrosa—particularly carats of gem-quality diamonds—slid in both the second quarter and first half of the year, as the mining company is still without Mir, the underground mine that has been closed since August 2017 after eight workers were killed in a flood there.

Alrosa sold 13.3 million carats of diamonds in the first quarter, but that number dropped to 9 million in the second quarter. Year-to-date, diamond sales by volume have totaled 22.4 million carats, down 8 percent from the same period last year.

Gem-quality diamond sales totaled 10.1 million carats in the first quarter, declining by nearly half to 6.3 million carats in the second quarter. Year-to-date, they are down 14 percent.

Commenting on the company’s first-half results, CEO Sergey Ivanov said Alrosa “delivered strong financial results, reaffirming its industry leadership both in profitability and market share.”

He also mentioned the diamond miner is focused on core assets, selling non-core gas assets at auction in early 2018 for 30.3 billion rubles (more than $400 million).

It used the money to pay down debt and, in July, global credit rating agency S&P upgraded Alrosa’s credit rating to investment-grade level.

Alrosa said its production guidance for the year remains unchanged at 39 to 40 million carats.

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