Alrosa Sales Climb to $1.34 Billion

Selling $651.5 million worth of rough diamonds to the Russian gemstones repository Gokhran, brought Alrosa’s sales in the first three quarters of the fiscal year to $1.34 billion, the Russian diamond miner reported.

The results bring Alrosa closer to President Fyodor Andreyev’s stated goal of $2.75 billion in sales this year. However, the $1.41 billion gap won’t likely be bridged in the last quarter.

In recent months, Alrosa’s sales have neared $200 million per month. Even if the company sustains these sales levels, it will generate less than half of the sales needed to reach Andreyev’s goal.

According to an Interfax report, Alrosa paid off $288 million in loans in the third quarter. The company has been borrowing heavily; at the end of September its debts stood at 120 billion rubles ($4 billion), according to Andreyev.

Andreyev, who in the past served as Alrosa’s vice president of finance, was apparently brought back to the company to look closer at the figures and focus on reviving the company’s financials. As part of that process, he plans to reduce the company's debt level to $3.2 billion by the end of 2010.

One proposed way of elevating the debt burden is issuing Eurobonds. The company is reportedly considering issuing between 10 billion rubles (US$339 million) and 30 billion rubles (US$1 billion) in bonds in December or in early 2010.