|Russian mining company Alrosa has released its IFRS financial results for the first half of 2017, reporting revenue of RUB 155.6 billion (US$2.71 billion), down 16.7 percent when compared with H1 2016's RUB 186.7 billion.
Net profit for the period reached RUB 48.9 billion (US$0.85 billion).
The company reports that EBITDA for the first half of 2017 was RUB 72.8 billion (US$1.27 billion).
The company notes that the overall weaker performance in the first half of 2017 compared with H1 2016 is due to various market and macroeconomic factors, including an 18 percent appreciation of the ruble against the U.S. dollar.
Another factor was a 15 percent drop in the average price of diamonds sold by the company as a result of changes in the diamond mix. This was due to the accumulated inventories of smaller size rough diamonds that had not been purchased in 2016 because of the monetary reform in India, says Alrosa. These inventories were subsequently cleared during H1 2017 once demand improved, with the volumes and sales mix stabilizing in the second quarter of 2017, with the average price of diamonds sold growing by 20 percent compared with Q2 2016.
Commenting on the results, Alrosa's CEO Sergey Ivanov says, "ALROSA's H1 2017 results were influenced by macroeconomic factors beyond the Company's control. It stands to note here the effectiveness of the cost optimization program adopted by the Company."
Continues Ivanov: "In H1 2017, we succeeded in keeping our production costs flat and reducing other expenses, including switching to cheaper energy sources, capping the utilization of materials and equipment and boosting procurement efficiency."The CEO also confirms that Alrosa's initial 2017 diamond production target of 39.2 million carats remains unchanged, noting that, "Production volumes missing due to the accident at the Mir underground mine in 2017 will be set off by higher diamond output at other mines, primarily the Jubilee pipe."