Sourcing

Alrosa’s Sales Slump as Diamond Demand Slows

SourcingAug 21, 2019

Alrosa’s Sales Slump as Diamond Demand Slows

The miner’s deputy CEO said there are several “negative factors” impacting the market.

2019_Alrosa_rough_copy.jpg
Alrosa’s rough diamond sales totaled 8.3 million carats in the second quarter, down from 9 million carats in the same period last year, an 8 percent drop.

Moscow—Alrosa saw sales drop in Q2 and has cut it sales outlook for the year amid what its deputy CEO describes as “negative factors” impacting the diamond market.

The miner reported Monday that second quarter revenue fell 21 percent year-over-year to 57 billion rubles ($856.8 million) as it sold fewer and less expensive diamonds.

Year-to-date, revenue is down 24 percent.

Rough diamond sales by volume (both industrial and gem quality) totaled 8.3 million carats in the second quarter, down 8 percent year-over-year and 16 percent year-to-date.

Sales of gem-quality diamonds slipped 5 percent and are down 15 percent so far this year.

Alrosa’s net profit dropped 47 percent year-over-year to 13 billion rubles ($195.4 million) on the backs of lower sales and slimmer margins and is down 36 percent year-to-date.

Commenting on the results, Alrosa Deputy CEO Alexey Philippovskiy said the diamond market is being impacted by a slowdown in jewelry sales, which he tied to “global macroeconomic uncertainties amid escalating trade wars,” referencing the continuing back-and-forth between China and the United States.

Also contributing to the diamond miner’s slowdown in sales is the fact that mid-stream suppliers and retailers—who, Alrosa noted, are “embracing more efficient stock management practices”—have all the diamonds they need right now, while cutting and polishing businesses in India continue to have problems securing financing to buy rough.

Alrosa noted, however, that demand “can” rebound near the end of the third quarter as suppliers and retailers stock up for the holiday season.

The company’s comments mirror those of rival De Beers. CEO Bruce Cleaver cited “macroeconomic uncertainty” and noted that retailers are keeping inventory levels low in explaining De Beers’ 53 percent diamond sales slump last month.

Following the release of its second quarter results, Alrosa updated its sales guidance for the year to 32-33 million carats.

On the production side, the company mined 9.7 million carats of rough in the second quarter, a 14 percent year-over-year increase.

Alrosa attributed the increase to the launch of production at the V. Munskoye deposit, an increase in higher-grade ore processing at the Botuobinskaya pipe and a higher average diamond grade at Severalmaz.

Year-to-date, diamond production is up 10 percent.

The company upped its production guidance slightly, from 38 to 38.5 million carats, due to efficiency gains.

Diamond inventories rose to 15.9 million carats as of the end of Q2, a 36 percent year-over-year increase attributable to

lower sales and higher output.

Alrosa’s average realized price for gem-quality diamonds was $130/carat in the second quarter, up 5 percent from $123/carat in the first quarter but down 21 percent from $164/carat a year ago.
Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

The Latest

Future Fortune sapphire ring
TechnologyMar 28, 2024
Pinterest’s 2024 Wedding Report Is Out

The report shows that couples are searching for vintage and antique rings, gold jewelry, pearls, and colorful pieces.

David Ettinger
IndependentsMar 28, 2024
David Ettinger of Bechdel Jewelers Dies at 69

He’s remembered as a “font of passion,” leaving behind a legacy of dedication to his craft and community.

Jewelers of America logo
IndependentsMar 28, 2024
JA to Host Series of Learning Workshops

The first one will take place next month during the Jewelers of Louisiana’s and Mississippi Jewelers Association’s conventions.

Jewelers of America Fly In Washington, D.C.
Brought to you by
How Jewelers of America Represents Your Business

For over 30 years, JA has advocated for the industry, fought against harmful legislation and backed measures that help jewelry businesses.

Jaeger-LeCoultre Madison Avenue NYC store
WatchesMar 28, 2024
Peek Inside Jaeger-LeCoultre’s Revamped NYC Flagship

The redesigned boutique features interactive displays and a workshop space for hands-on learning about watchmaking.

Weekly QuizMar 28, 2024
This Week’s Quiz
Test your jewelry news knowledge with this short test.
Take the Quiz
Kira Diam solar plant
Lab-GrownMar 27, 2024
Indian Lab-Grown Diamond Manufacturers Keep Growing

A combination of factors is driving growth in the industry despite the precipitous drop in prices across the board.

SRK Empire and SRK House
Policies & IssuesMar 27, 2024
SRK Exports’ Journey Toward Net Zero Impact

By the end of this year, SRK’s diamond manufacturing complexes will achieve net zero emissions, one of an impressive array of achievements.

BTYB-HoBrothers-updated.png
Brought to you by
The Scalable, Professional, and Effortless Solution for High-Demand Custom Jewelry Retailers

Ho Brothers offers scalable solutions for the future of custom jewelry.

Georgia May Jagger Tommy Hilfiger ad campaign
FinancialsMar 27, 2024
Movado’s Full-Year Sales Sink 11%

The company plans to invest $25 million in marketing initiatives to boost awareness around its namesake and licensed brands.

Hand holding shopping bags
SurveysMar 27, 2024
Consumer Confidence Held Steady in March

Optimism about the current state of the economy was offset by anxiety around inflation and the political environment.

Bernadette Mack
Policies & IssuesMar 27, 2024
Mercury Free Mining Hires Bernadette Mack

The former WJA executive director is MFM’s new managing director.

April Is Diamonds Do Good Month
Policies & IssuesMar 27, 2024
Diamonds Do Good Announces Its April Initiative

DDG encourages retailers to educate customers on the positive impact of purchasing natural diamonds.

Tiffany & Co. With Love, Since 1837
MajorsMar 26, 2024
Tiffany & Co. Debuts ‘With Love, Since 1837’ Campaign

Highlighting the most iconic Tiffany collections, it’s inspired by the company’s late window designer, Gene Moore.

National Jeweler columnists Duvall O’Steen and Jen Cullen Williams
ColumnistsMar 26, 2024
Creative Connecting: AI Tools and Tips for Social Media

Jen Cullen Williams and Duvall O’Steen explore how jewelers can save time and money by using AI to analyze engagement and create content.

Nordstrom Men’s Store New York City
MajorsMar 26, 2024
Nordstrom May Go Private, Says Report

The retailer previously turned down an $8.4 billion offer in 2018.

Interior of Miami Lakes Jewelers
IndependentsMar 26, 2024
Miami Lakes Jewelers to Close After 37 Years

The Florida store’s owner Miguel Gonzalez is retiring.

 International Gemological Institute
GradingMar 26, 2024
IGI Announces Tech for ID’ing Lab-Grown Colored Diamonds

The lab stresses the importance of accurate identification, as the difference in price is “substantial.”

Kendra Scott lab-grown diamond jewelry
CollectionsMar 25, 2024
Kendra Scott Debuts Lab-Grown Diamond Fashion Jewelry

The brand also plans to expand its retail footprint from 138 to 200 stores over the next three years.

Instappraise logo NAJA logo
Events & AwardsMar 25, 2024
NAJA, Instappraise Offering Scholarships for Aspiring Jewelry Appraisers

One is reserved for a NAJA member, the other for a non-member.

Carie Lehrke and Megan Mattice
MajorsMar 25, 2024
Borsheims Announces New VP of HR, Assistant Manager

Longtime employees Carie Lehrke and Megan Mattice have received promotions.

My Next Question graphic vintage jewelry webinar
Recorded WebinarsMar 22, 2024
Watch: How to Buy and Sell Vintage Jewelry

Three guests joined National Jeweler and Jewelers of America to discuss trending time periods, spotting reproductions, and more.

Chris Clipper and Robert Lepere
MajorsMar 22, 2024
David Yurman Announces New CFO, Chief People Officer

Chris Clipper and Robert Lepere join the company with 50 years of combined experience.

Nakard pyrite earrings
CollectionsMar 22, 2024
Piece of the Week: Nakard’s Pyrite Earrings

The trendy, metallic earrings wink at classic spring colors.

Stock image of police cars with their lights on
CrimeMar 21, 2024
Sparks Fly as Burglars Lose Safe on California Freeway

JSA said a man and woman pulled the safe out of an Oakland jewelry store but couldn’t quite get it into their van.

Grizzly Mining rough emeralds
SourcingMar 21, 2024
Grizzly Sells 4,145-Carat Emerald for Over $1M

The miner’s March auction generated $19 million.

Helen McCluskey
MajorsMar 21, 2024
Signet Jewelers Names New Board Chair

Helen McCluskey will succeed H. Todd Stitzer when he meets his 12-year term limit in June.

Julia Roberts wearing a Chopard necklace
CollectionsMar 20, 2024
Julia Roberts Co-Designs New Chopard Jewelry Collection

“Chopard x Julia Roberts” showcases the first gems cut from the 6,000-carat-plus “Insofu Emerald."

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy