Alrosa H1 Sales +2.7% to $2.1B, Reports 1.3B Cts Reserves

(IDEX Online News) – Alrosa is closing the first half of the fiscal year with a show of force ahead of its planned IPO, openly discussing its financial results, reserves, position and global outlook. The Russian diamond giant reported sales of RUB 36.55 billion ($1.18 billion) in the second quarter, rising 9.7 percent year-over-year.

Profit in the period increased to RUB 14.56 billion ($468 million), compared to a $95.6 million loss in the second quarter of 2010.

In the first half of the year, diamond production increased 9.9 percent to 19.3 million carats, however the volume of sales fell 22.6 percent to 19.1 million carats, leaving he company with a growing stock reserve.

Rising rough diamond prices allowed Alrosa to see an increase in revenue despite the decline in sales by carat – increasing 2.7 percent to RUB 66.15 billion ($2.13 billion).

The average value of sales in the first half of 2011 was $111.35 per carat, up 83.8 percent from $83.82 p/c in the first half of 2010, according to Alrosa's figures.

The company currently sales about 65 percent of its goods by value to long term contracted buyers, which typically have a three-year contract.

In the past year, the firm increased its auction offerings to 20 percent of sales - at the expense of short-term contracts – allowing it to increase its income.

Alrosa reported a total reserve of 1.27 billion carats and total resources of 1.28 billion carats.