August 24, 2018 / 10:45 AM / 3 months ago

Russian diamond miner Alrosa's net income inches higher in Q2

MOSCOW, Aug 24 (Reuters) - Alrosa, the world’s largest producer of rough diamonds in carat terms, said on Friday its second-quarter net profit rose about 1 percent year on year as higher prices helped offset a sales drop.

State-controlled Alrosa and Anglo American’s De Beers produce about half of the world’s rough diamonds. In 2017, Alrosa was hit by a shutdown at its Siberian underground Mir mine, which had accounted for 9 percent of its annual diamond output before it was partly flooded in August 2017.

The company said on Friday its net income in April-June grew to 25.4 billion roubles ($379.3 million) from 25.2 billion a year earlier, while core profit, or EBITDA, rose 10 percent to 41.3 billion roubles.

Revenue was up 2 percent year on year to 72.2 billion roubles thanks to an increase in average selling prices. Sales volumes dropped 11 percent on the back of an 18 percent decrease in production.

The company said on Friday its 2018 sales forecast was 39-40 million carats, in line with its previous guidance. Alrosa said previously it expected 2018 production of 36.6 million carats with sales of about 40 million carats - higher than production due to sales from the stockpile in early 2018.

Free cash flow expanded 33 percent year on year in the second quarter and net debt fell 83 percent from last year.

Alrosa is currently considering ways to resume production at the Mir mine with the project’s feasibility study expected to be ready in 2019.

$1 = 66.9725 roubles Reporting by Polina Devitt and Maria Kiselyova

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