Alrosa’s Revenue Falters on Weak Prices

RAPAPORT… Alrosa’s sales fell in the first quarter amid lower rough prices
and a larger proportion of small diamonds.



Revenue from rough stones slid 37% year on year to $988
million for the three months ending March 31, the Russia-based miner said
Wednesday. Sales volume declined 21% to 10.6 million carats, while the average
price decreased 20% to $123 per carat for gem-quality diamonds. Prices dropped
3.1% versus the fourth quarter of 2018 on a like-for-like basis, it added.


“Average realized prices of rough, gem-quality diamonds
decreased…due to a larger share of small-size diamonds and lower prices mostly
for medium-size diamonds,” Alrosa explained.


Polished-diamond sales plummeted 31% to $16.4 million for
the period.


Production grew 5% to 7.8 million carats during the quarter
as the miner increased ore processing at its Botuobinskaya pipe and ramped up
the Udachny underground mine. Alrosa also raised output at its Severalmaz
division, as it processed higher-grade ore. In addition, it launched operations at the
Verkhne-Munskoye deposit. The company’s inventory increased 16%
to 14.3 million carats as of March 31, compared with a year
earlier.


The miner has forecast a 4% increase in production to 38
million carats for 2019, compared with 36.7 million carats last year.


Image: The Botuobinskaya pipe. (Alrosa)