Alrosa, the world’s biggest producer of rough diamonds, saw its net profit increase 100-fold in the second quarter, signaling the industry’s recovery from the pandemic-induced collapse in 2020.
The group based in Yakutia, Eastern Siberia, posted a net profit of 30.2 billion rubles between April and June, compared with 0.3 billion rubles a year earlier.
Sales increased ninefold year-over-year to 93.5 billion rubles, helped by an 18-fold increase in carat diamond sales compared with the same period last year.
Compared to the previous quarter, the recovery was marked by a 26% increase in net profit.
World’s largest rough diamond producer, which competes with De Beers, is gradually restoring output after reductions that dropped from 22% to 30-million carats when global diamond sales were affected by the Covid-19 pandemic last year.
Alexei Philippovski, Alrosa CFO, noted in a statement that the second quarter saw continued growth in demand for diamond jewelry, with the U.S. and China (including Hong Kong) growing by an average of 35% and 15%, respectively.
“There has been an increase in diamond sales due to increased demand,” he said.
“We are positive about the end-consumer market going forward. The market is recovering faster than we expected,” he said, adding that there are still 20% less diamonds available than before; global production is unlikely to bounce back in the near term.
In 2020, the group had seen its net profit divided by two, under the impact of the pandemic and the fall of the ruble.
Additionally, the miner reduced its 2021 capital expenditure estimate by four billion roubles to 21 billion roubles, adding that the board would recommend a dividend payment this month.
On August 14th (local time), ALRS traded at 135.05, down 2.29% from previous close.