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MOSCOW May 25 Russian diamond miner Alrosa
, the world's largest producer of rough diamonds in
carat terms, reported a 55 percent drop in first-quarter net
profit on Thursday, blaming a stronger rouble.
State-controlled Alrosa and Anglo American's De
Beers unit produce about half of the world's rough diamonds.
Alrosa announced a first-quarter net profit of 22.7 billion
roubles ($404 million) as earnings before interest, taxation,
depreciation and amortisation (EBITDA) fell 41 percent from a
year earlier to 35.2 billion roubles.
Revenue declined 17 percent from a year earlier to 84.8
"Rouble appreciation against the U.S. dollar, and a change
in the product mix resulted in a decrease of gem-quality rough
diamond sales year-on-year," Alrosa said in a statement.
Revenue has begun to improve however, rising 38 percent in
January to March from the previous quarter as Indian demand for
rough diamonds recovered.
Alrosa has previously said that it increased diamond
production by 9 percent in the first quarter from a year earlier
to 8.9 million carats, while diamond sales were well above
production and reached 14.1 million carats for the period.
The high sales mean Alrosa's inventory was reduced by 5.2
million carats to about 13 million carats and is now closer to
Alrosa's long-term target of 10 million carats.
Analysts at VTB Capital said in a note on Thursday that
Alrosa's EBITDA missed their expectations due to the accounting
treatment of inventories but a free cash flow of 35 billion
roubles exceeded their estimates by 17 percent.
VTB Capital said a current recovery in diamond prices might
enable Alrosa to report comparable earnings in the second
quarter despite seasonally lower sales volumes and a stronger
Alrosa's share price in Moscow was down 2.6 percent on
Thursday, underperforming a 0.2 percent decline in the MICEX
($1 = 56.2022 roubles)
(Reporting by Polina Devitt and Diana Asonova; Editing by Susan