Alrosa Profit Drops in Third Quarter

RAPAPORT... Weak rough-diamond demand led to a drop in profit at Alrosa in the third quarter, the Russian miner reported.  Profit slid 44% to RUB 13.5 billion ($211.6 million) for thethree months ending September 30, as revenue faltered and the company's margin fell it said lastweek. Sales decreased 37% to $611 million, as proceeds from bothrough and polished diamonds declined. Rough sales slipped 37% to $601 million,while the average price for gem-quality diamonds slid 32% to $135 per carat,reflecting sales of a higher proportion of small-sized diamonds. Sales volumedropped 5% to 6.4 million carats. "The diamond-jewelry demand was affected by increasedmacroeconomic uncertainty that put a damper on consumer confidence," thecompany noted. "Amid the declining demand since the beginning of 2019,diamond-jewelry manufacturers and cutters have been actively reducing theirstocks of end products and rough diamonds." Rough output grew 14% year on year to 12.1 million caratsfor the quarter, stemming from the launch of production at the Verkhne-Munskoyedeposit, as well as higher production from the Botuobinskaya pipe. In the first nine months of the year, the miner produced29.7 million carats, up 12% year on year. Rough sales for theJanuary-to-September period fell 34% to $2.39 billion. Alrosa's sales grew 9% year on year to 264.4 million inOctober, as prices and demand continued to stabilize, the miner noted.Rough-diamond sales increased 9% to $253.9 million for the month, whilepolished jumped 17% to $10.4 million. However, despite the growth in October, weakness in themarket affected the company's ten-month total. In the first ten months of theyear, sales fell 31% to $2.7 billion. Rough-diamond sales dropped 32% to $2.6billion, with polished declining 43% to $47.2 million. Image: Rough diamonds. (Alrosa)