MOSCOW – Russian state-controlled diamond producer Alrosa said on Friday its 2018 net profit rose 15% to 90.4 billion roubles ($1.4 billion), as a fall in sales volume was offset by stronger global prices.
Though sales volume fell by 8% year-on-year, stronger pricing, particularly in the first half of 2018, meant sales by value increased by 6 percent to $4.4 billion, Alrosa said.
This helped to lift revenue 9% compared with 2017.
Average prices rose 2.9% in 2018, following a 3.4 percent gain the previous year, Alrosa said.
The company said it made earnings before interest, taxes, depreciation and amortisation (EBITDA) of 156 billion roubles in 2018, up 23% from 127 billion roubles the previous year.
Shares in the diamond miner were down 1% at 95 roubles each at 0923 GMT.
“The key financial drivers included improved market environment (recovery in prices and stronger demand for diamond jewellery in major markets) and management efforts to boost efficiency,” Deputy Chief Executive Alexey Philippovskiy said in a statement.
Global diamond output, however, decreased 5% from the previous year, driven primarily by a fall in Alrosa’s own output and that of miner Rio Tinto.
Alrosa’s diamond production in 2018 fell 7% year-on-year to 36.7 carats, the miner said, due to the closure of its Mir mine, and completion of open-pit mining at another location.
Production at the Siberian underground mine was halted in August 2017 after it was partially flooded.
Looking ahead, Alrosa said it expected its own production to increase this year to between 37.5 million and 38 million carats, up from 36.7 million carats in 2018.
Globally, it expects supply to continue to gradually decrease, the company said, while stocks at jewellers and polishers are expected to remain low due to foreign exchange volatility and rising financing costs for polishers.
($1 = 65.3715 roubles)
(Reporting by Polina Ivanova and Maria Kiselyova; Editing by Mark Potter)