Alrosa’s May sales drop 85%
Alrosa on Wednesday said its sales of rough and polished diamonds stood at $40.1 million in May, an 85% drop from $266 million in sales a year ago.
The May figure represents a slight rise from the previous month, but April sales had plunged to $15.6 million as the coronavirus crisis hit demand.
Alrosa’s total rough and polished diamond sales in January–May 2020 amounted to $959.9 million, including rough diamonds sales of $930.6 million, polished diamonds of $29.3 million.
“Despite a noticeable increase compared to April trough levels, sales in May were expectedly low, as Alrosa remains committed to its price over volume strategy, allowing the cutters, who are just resuming their work, to reduce the accumulated rough and polished diamond stock,” Evgeny Agureev, deputy CEO said in the media statement.
“Alrosa kept the same approach for its June trading session. We believe that our approach to avoid putting pressure on the market will accelerate recovery of the market of supply and demand balance,” Agureev added.
The company expects that buying activity at the mid-stream resumes in the middle of the third quarter.
S&P confirmed on Wednesday Alrosa’s BBB- investment grade credit rating with a “stable” outlook.
The rating agency draws attention to the company’s consistently high profitability, its leading position in the diamond market and high-quality reserves, as well as “prudent financial and dividend policies and high level of corporate governance”.
Among measures taken, S&P Global Ratings highlights downward correction of the company’s capex program and production target.
The world’s largest diamond miner by volume reported an 87% slide in first-quarter net profit on Friday.
“The confirmation of Alrosa’s rating at the investment grade with a stable outlook during this challenging period for the global diamond industry underscores the company’s prudent approach to its financial and sales policy,” said Alexei Filippovsky, deputy director-general.