Alrosa diamond sales drop in second quarter on fading demand

Russia’s Alrosa (MCX:ALRS), the world's top diamond producer by output in carats, reported Monday a 21% drop in sales from April to June when compared to the previous quarter, on what the company called “fading” demand for rough diamonds.

Net profit for the period, however, increased substantially — up 61% from a year ago to 40.5 billion roubles ($625 million), helped partly by the rouble's weakness against the US dollar. Yet the figure is 19% lower than the record high profit recorded in the first quarter of the year.

Alrosa, which together with De Beers controls almost two-thirds of the diamond market, said it maintains a “conservative outlook” on the diamond market going forward. It also said it continues to executes cost control measures.

Last month, Russia completed the sale of a 10.9% stake in the state-controlled miner for 52.2 billion roubles ($813.05 million). The move was the first of a series of planned partial privatizations of state-owned companies to cover the country’s budget deficit, which is suffering from weak prices for its main export — crude oil.