Alrosa’s profit jumps on higher diamond prices

Alrosa is gradually restoring output after last year’s 22% reduction to 30 million carats when global diamond sales were hit by the covid-19 pandemic.(Image courtesy of Alrosa.)

Russian state-controlled diamond producer Alrosa on Friday reported second-quarter net profit of 30.2 billion roubles ($411 million), up 26% from the previous quarter, thanks to higher prices.

The world’s largest producer of rough diamonds, which competes with Anglo American unit De Beers, is gradually restoring output after last year’s 22% reduction to 30 million carats when global diamond sales were hit by the covid-19 pandemic.

Net profit in the same quarter last year was a mere 300 million roubles ($4 million) because of the pandemic.

Demand for diamond jewellery continued to recover in the second quarter of this year, Alrosa finance chief Alexey Philippovskiy said in a statement.

“Our outlook for the end-consumer market remains positive. The market is recovering faster than we predicted,” he said, adding that diamond supply remains 20% below pre-pandemic levels and global production is unlikely to bounce back in the medium term.

Alrosa said it was on track to produce 31.5 million carats this year, with “an optimistic scenario” of additional growth of 5% growth.

The miner also cut its 2021 capital expenditure estimate by 4 billion roubles to 21 billion roubles, it said, adding that the board would recommend a dividend payment this month.

($1 = 73.5100 roubles)

(By Polina Devitt; Editing by David Goodman)

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