Moscow: Alrosa said revenue in Q3 2021 amounted to RUB 77 billion, down 18% quarter-on-quarter (qoq) driven by a 20% lower diamond sales volumes and changes in the sales mix. This was partially offset by a higher price index (+10% qoq). The company’s Q3 revenue grew 55% year-on-year due to the low base of Q3 2020 (rough diamond sales of 5.0 million carats in Q3 2020 versus 9.2 million carats in Q3 2021). The year-to-date revenue increased 2.1x to RUB 261 billion, mainly due to a 2.4x rise in sales volumes.

Polished and rough diamond prices rebounded by 9% and 12%, respectively, versus the early 2019 levels on the back of the strong demand and limited supply, the miner noted.

Net profit stood at RUB 25 billion, down 17% qoq due to lower return on sales. Year-to-date net profit climbed to RUB 79.2 billion as against RUB 10.9 billion a year ago on the back of recovering sales volumes and prices. Alrosa expects to produce around 32.5 million carats in 2021.

Alexey Philippovskiy, Alrosa’s CFO, said, “In Q3’21, the demand for diamond jewellery continued to grow in double digits. In the USA, jewellery sales surpassed the 2018–2019 highs by over 50%, while in China demand for jewellery exceeded pre-crisis levels by 10%. The strong end demand for jewellery and the corresponding demand for polished diamonds since the beginning of the year was initially met thanks to the rough diamond stocks accumulated by producers in 2019–2020. However, by the start of Q3’21, producers had run out of their stocks and began supplying “freshly” produced diamonds. In the coming years, the global diamond production will remain 20-25% below the pre-pandemic levels.”

Alrosa noted, “Our outlook for the diamond jewellery market remains positive, which, combined with the low inventories in the cutting sector and the structural decrease in global rough diamond output starting 2021 onwards to 110–120 m ct (compared to 140–150 m ct prior to 2019), will help maintain high prices for rough diamonds in the long term.”