Stronger Ruble And Lower Average Prices Hit ALROSA's First Half Figures

The company’s revenue in H1 2017 amounted to $2.65 billion (RUB 155.6 billion), while net profit to $830 million (RUB 48.9 billion). 

Inventories of small rough diamonds that built up at the end of last year due to the monetary reform in India were cleared in H1 2017 thanks to improved demand, the mining giant reported. In Q2 2017, the volumes and sales mix stabilized with the average price of diamonds sold growing by 20 percent on the quarter.

As a result of the company's cost management program, production costs in H1 2017 increased by less than 1 percent, with diamond production rising by 14 percent. The 12 percent increase in the cost of goods sold was driven by a 12 percent growth in volumes of diamond sales.

"ALROSA's H1 2017 results were influenced by macroeconomic factors beyond the company's control," said CEO Sergey Ivanov. "It stands to note here the effectiveness of the cost optimization program adopted by the company. In H1 2017, we succeeded in keeping our production costs flat and reducing other expenses, including switching to cheaper energy sources, capping the utilization of materials and equipment and boosting procurement efficiency."

ALROSA's initial 2017 production target of 39.2 million carats remains unchanged. "Production volumes missing due to the accident at the Mir underground mine in 2017 will be set off by higher diamond output at other mines, primarily the Jubilee pipe," said Ivanov.