Alrosa reports full-year profit slump of 77.3%

Russia’s sanctions-hit diamond producer Alrosa on Friday reported a 77.3% fall in 2024 net profit year-on-year to 19.3 billion roubles ($219.32 million) on revenue of 239.1 billion roubles.

Group of Seven (G7) countries banned direct imports of Russian diamonds in January 2024. This was followed by a European Union and G7 ban on imports of Russia-origin diamonds via third countries. Alrosa itself has been under US sanctions since 2022.

Alrosa is the world’s largest producer of rough diamonds by volume. Revenue was down 25.9% year-on-year in 2024.

With Russia’s central bank holding interest rates at 21%, many companies have voiced concerns about the soaring cost of borrowing and some have cut back on investments, threatening to slow Russia’s economic growth.

Alrosa said its net debt rose to 107.9 billion roubles at the end of 2024, from 36.1 billion roubles a year earlier, while its net debt to EBITDA ratio jumped to 1.37x from 0.26x.

Diamond reserves for the year rose to 129.9 billion roubles, Alrosa said, up from 84.3 billion roubles at the end of 2023.

CEO Pavel Marinychev in November said Alrosa had accumulated a large enough financial cushion to survive what he termed the “deep crisis” in the global diamond industry, while counting on possible support through occasional government diamond purchases through a state fund.

Alrosa also announced plans to cut labour costs, reduce some of its 35,000 staff and suspend development of its least profitable assets.

($1 = 88.0000 roubles)

(By Anastasia Lyrchikova, Lucy Papachristou and Alexander Marrow; Editing by Andrew Osborn)