ALROSA announced that its second quarter revenue for fiscal 2019 stood at RUB 57.4 billion ($858.4 million), a 21 percent drop from the RUB 72.2 billion ($1.08 billion) it had registered in Q2 2018. Net profit at RUB 13.4 billion ($200.4 million) was 47 percent down from the RUB 25.4 billion ($379.8 million) in profit earned during Q2 2018.
The company attributed the fall in revenue to lower sales of just 8.3 million carats during the period as against the 9 million carats sold in the second quarter of 2018, as well as changes in the sales mix.
ALROSA said that production for the year was expected to be 38.5 million carats and it expected to sell between 32 and 33 million carats.
Commenting on the results, ALROSA Deputy CEO Alexey Philippovskiy stated, "The diamond market continued to be affected by a number of negative factors that had first emerged as early as the second half of the previous year.”
He added, “These include a slowdown in jewellery sales following strong performance of 2017-2018, particularly as a result of global macroeconomic uncertainties amidst escalating trade wars. As an additional factor, the mid-stream and retailers have elevated inventories, while India's cutting and polishing business continues facing difficulties in securing affordable financing.”
He went on to say, “A new trend — the growing share of online jewellery sales mostly in the US — is now gaining its importance for the industry.”