Sanctions-Hit Alrosa Sees Revenue Fall 25% in H1 2025, Profit Boosted by Angola Asset Sale
Russia’s state-controlled diamond miner Alrosa has reported a 25% year-on-year drop in first-half revenue, citing persistent geopolitical and macroeconomic pressures as sanctions, high interest rates, inflation, and rising taxes weigh on demand and profitability.
The Group of Seven (G7) banned direct imports of Russian diamonds in January 2024, later expanding the restrictions—together with the EU—to prohibit imports of Russia-origin stones via third countries.
Alrosa has been under U.S. sanctions since 2022 following Russia’s full-scale invasion of Ukraine.
Revenue for the six months ended June 30, 2025, fell to 134.3 billion roubles ($1.67 billion), while EBITDA dropped 42% to 37.1 billion roubles.
Despite the revenue decline, net profit rose 10.8% to 40.6 billion roubles ($506.7 million), aided by the sale of Alrosa’s 41% stake in Angola’s state-controlled Catoca mine, which brought in 15.9 billion roubles.
Net debt surged almost tenfold to 61 billion roubles, though cash, cash equivalents, and bank deposits increased 8.4% to 115.4 billion roubles.
Alrosa attributed the weaker performance to rising costs for materials and fuel, compounded by Russia’s elevated borrowing costs.
While the central bank has begun easing monetary policy—most recently cutting the key rate to 18% from 20% in July—interest rates remain historically high.
“The relatively high key rate and inflation continued to have a negative impact on the group in the first half of 2025,” the company stated.
Strategic Divestment in Angola
Under international pressure, Angola formalised the removal of Alrosa from Catoca’s shareholder structure in May 2025, replacing it with a subsidiary of Oman’s sovereign wealth fund.
Prior to the deal, Catoca was jointly owned by Alrosa (41%) and Endiama EP, Angola’s national diamond company.
The divestment marks a significant geopolitical shift, as Angola sought to maintain access to Western markets by distancing itself from Russian partnerships.
