The net income of Russian diamond miner Alrosa is slightly higher in Q2 in the second quarter

MOSCOW, August 24 (Reuters) – Alrosa, the world's largest producer of carat diamond rough diamonds, said on Friday that net profit in the second quarter rose by around 1 percent from a year ago as higher prices helped to compensate for a decline in sales.

Government-run Alrosa and Anglo American De Beers produce about half of the rough diamonds in the world. In 2017, Alrosa was hit by a shutdown on its Siberian Mir underground mine, which represented 9 percent of its annual diamond production before it was partially flooded in August 2017.

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

Sales rose 2 percent year-on-year to 72.2 billion rubles thanks to an increase in average sales prices. Sales volumes fell by 11 percent due to a decrease in production of 18 percent.

The company said on Friday that the sales forecast for 2018 was 39-40 million carats, in line with previous guidelines. Alrosa said earlier that it expected 2018 production of 36.6 million carats with a turnover of about 40 million carats – higher than the production due to the sale of the stock in early 2018.

Free cash flow grew 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 in the Mir mine with the feasibility study of the project that is expected to be completed in 2019.

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

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