Alrosa points to weak demand for 21% revenue drop
Alrosa announced on Tuesday a 21% drop in revenue, down to RUB 238 billion ($3.32 billion), for 2019.
The Russian diamond miner said in financial results for Q4 2019 and FY 2019 that sales totalled 33.4m carats, down 12% from 38.1m for 2018, because of “weaker demand in the rough and polished diamonds market.”
The company’s net profit declined by 31% to RUB 63 billion ($ 880 million).
“In the first half of 2019, the diamond market was impacted by the excessive supply of polished diamonds and a decreased availability of funding for the Indian midstream segment,” Alrosa CFO Alexey Philippovskiy said.
According to the company, diamond producers were able to adjust their sales policy by reducing supply by 20%, helping to improve the balance of demand and supply across the chain by the end of 2019.
“In 1H 2020, jewellery demand will be impacted by exogenous factors. At the same time, the diamond industry looks much healthier in 2020, with balanced stocks, both for jewellery in retail, and for cutters’ diamonds, and with the mid-stream leverage back to historical levels,” Philippovskiy added.
The company said it expects to produce 34.2 million carats this year.