9 Jul 2010 12:56

Alrosa produces 16.6 mln karat in diamonds in H1

MOSCOW. July 9 (Interfax) - Alrosa , Russia's Yakutia-based diamond monopoly, according to preliminary results, produced 16.6 million karat in diamonds during the first half of 2010, a year-on-year decrease of 4.6%, the company said in a statement.

The company produced 8.6 million karat in the first quarter and 8 million karat in the second quarter.

Sales of diamond production in the first half of 2010 came to $1.973 billion compared to $361 million in the first half of 2009 (when Alrosa was not on the market and sold its output to Russia's Gokhran or precious metals and gemstones repository). Around 31% of the company's production was sold according to long-term contracts.

In the second quarter of 2010, Alrosa sold $997 million in production, including $249.1 million on the domestic market and $747.9 million for export.

According to early reporting, Alrosa's RAS sales revenue in the first half came to 53.674 billion rubles, up from 13.413 billion rubles in the same period of 2009. Profit from sales came to 18.678 billion rubles compared to net losses totalling 2.526 billion rubles in the same period of 2009. Alrosa's net profit at the end of the first half of 2010 came to 2.502 billion rubles compared to 14.675 billion rubles in net losses a year previous.

Alrosa's net debt, which stood at 3.79 billion at the start of the year, decreased to $3.464 billion at the end of the first half, 38% of which is short-term debt and 62% is long-term debt. By the end of the year, Alrosa plans to reduce debt to $3.369 billion. Long-term debt will account for 91.5% of total debt.

Alrosa earmarked funds from its ruble-based bond placement for refinancing short-term debt in the first half of 2010 - four issues totalling 26 billion rubles. The company plans to issue $1 billion in 10-year Eurobonds in the fourth quarter of 2010.

As the market gradually recovers, Alrosa intends to increase its sales revenue and net profit forecast for this year. Sergei Goryainov, an expert at Rough & Polished, said that prices for rough diamond have already returned to the pre-crisis level and "there are grounds to talk about this market's full recovery".

The offer foresees an increase in revenue from sales, operations and services totaling 2.243 billion rubles to 94.617 billion rubles. Total rough diamond sales in 2010 will come to $3.282 billion and diamond sales - $124.9 billion. The company expects rough diamond sales to go up by $105.4 million, the bulk of which from OJSC Almazy Anabara - $45.9 million. The company plans to boost net profit by 3.227 billion rubles to 5.933 billion rubles.

Alrosa's forecast IFRS results foresee sales revenue to increase to 129.698 billion rubles (from 77.949 billion rubles in 2009) and 25.883 billion rubles in net profit (in 2009 - 3.463 billion rubles).