Alrosa’s sales dropped in the first half of the year amid a prolonged downturn in the global diamond market and sanctions on Russian goods.
Revenue fell 24% year on year to RUB 116.04 billion ($1.45 billion) for the six months that ended June 30, the Russian diamond miner reported last week.
The company did not specify the reason for the decline. However, it noted that “geopolitical tensions, as well as sanctions imposed by a number of countries…continue to have a negative impact.” Alrosa also said the sanctions “prevent the company from receiving financing from individuals and entities associated with the US.”
The US and other Western counties have imposed sanctions on diamonds from the federation since it began its war in Ukraine in February 2022. Russian rough continues to make its way into the market, but Alrosa no longer provides a breakdown of sales by destination.
The results come amid a slowdown in overall demand for rough and polished diamonds due to weak retail sales in China and competition from synthetics. Additionally, Alrosa had less rough to sell as it paused production at some mines earlier this year to save money during the downturn. It also pulled out of its joint ventures in Angola at the end of last year as its involvement meant the African country had trouble selling goods because of sanctions on Russia and Alrosa.
Meanwhile, net profit rose 12% to RUB 39.03 billion ($488.2 million) as the company cut costs by closing some assets and laying off a portion of its workforce.
Image: Rough diamonds. (Alrosa)
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