ALROSA, the world’s leader in diamond mining, announced its IFRS financial results for Q3 2019.
Revenue in Q3 2019 decreased by 20% q-o-q on lower sales volumes (down 23% q-o-q), which was partially offset by higher average realized prices. A 35% y-o-y decline in revenue is attributable to lower sales (down 5% y-o-y) and a higher share of small-size diamonds.
EBITDA in Q3 2019 was down 16% q-o-q (down 47% y-o-y). Free cash flow in Q3 2019 increased by 4% q-o-q. Net profit in Q3 2019 remained flat q-o-q, a 44% y-o-y decline is attributable to lower revenue and EBITDA margin (down 11% y-o-y).
According to Alexei Philippovsky, ALROSA’s CFO, “In 9M 2019, the diamond market was impacted by the oversupply of polished diamonds and challenging situation in India’s financial sector. As major producers have reduced diamond supply by a quarter since the beginning of the year and Indian cutters begin to see stocks gradually winding down, the supply and demand in the diamond pipeline seem to be heading towards balance again. Since early August 2019, the prices and demand have somewhat stabilized resulting in increased monthly sales, with total sales adding 7%, 42% and 2% m-o-m in August, September and October, respectively.”