Alrosa Diamond Sales Jump 70% in First Quarter as It Sells Stock

  • Alrosa first-quarter sales rose to 12.1 million carats
  • Alrosa's diamonds output declined 4.7% quarter on quarter

Alrosa PJSC said first-quarter diamond sales surged 70 percent as the world’s largest rough-gem miner sold from stockpiles that it built last year amid market turmoil.

Alrosa sold 12.1 million carats of diamonds and got about $1.3 billion of revenue, it said in a statement on its website Thursday. That’s up from 7.1 million carats in the final three months of 2015. Production declined to 8.2 million carats in the first quarter, compared with 8.6 million carats in the previous three months.

Alrosa held about 22 million carats valued at $2.5 billion in stockpiles at the end of 2015, while plans to cut the stock this year, Chief Executive Officer Andrey Zharkov told investors in March.

Last year, slowing Chinese demand and an industry credit crunch forced the De Beers and rival Alrosa, the two largest miners, to cut off supply to try to support the market. This year the miners accelerated sales as the demand recovered.

De Beers sold $660 million of diamonds in April, the diamond miner said in statement Tuesday. That’s up from the $617 million of the previous sale and $545 million in January.

Even as Alrosa’s sales rose in carats terms, sale prices were lower in the first quarter than at the last three month of 2015. The average selling price for gems of jewelry quality was $146 per carat compared with $166 in October through December. Technical diamonds fetched about $7 a carat in January through March from $10 in the preceding three months.

“Alrosa’s numbers are strong and we anticipate an upgrade in consensus estimates,” BCS Global Markets said in a note after the results were published. “We remain positive and do not expect a harsh decline in the rest of the year, although April to July” is “seasonally weaker,” it said.

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