Russian diamond producer Alrosa reported an 87% slide in first-quarter net profit on Friday and said its future results were likely to suffer from the impact of the coronavirus outbreak on sales.
Net profit fell to 3.1-billion roubles in the first three months of the year, it said, hurt by the revaluation of its foreign currency debt.
Sales at Alrosa, the world’s largest producer of rough diamonds, have also been hit by the pandemic which has caused a slump in global demand for precious stones since March.
Alrosa said its financial results for the second quarter and subsequent periods could be affected by the pandemic as well if restrictions imposed in connection with it are maintained.
“Today, we see diamond jewellery sales bouncing back in China and other Asian markets, which is expected to drive diamond demand up as soon as July–August,” Alrosa CFO Alexey Philippovskiy said in a statement.
Earnings before interest, tax, depreciation and amortisation (Ebitda) fell by 4% to 30-billion roubles on lower sales volumes in the first quarter, Alrosa said.
To reduce expenses amid low sales, the state-controlled company said it had cut its 2020 capital expenditure by 2-billion roubles to 20-billion roubles. It does not expect to breach any of its credit facilities, it added.
Alrosa has previously said that its balance sheet was robust, with more than in $1-billion of accumulated cash and its equivalents.
It is considering a new loan or debt refinancing later in 2020 as it will need to repay $513-million of debt, mainly to its Eurobond holders.
($1 = 68.6517 roubles)
(By Polina Devitt; Editing by Jason Neely and Jan Harvey)