Russia’s state-owned diamond producer, Alrosa, reported a 77.3% decline in net profit for 2024, falling to 19.3 billion roubles ($219.32 million) compared to the previous year. Revenue also dropped by 25.9%, reaching 239.1 billion roubles.
The decline follows a Group of Seven (G7) ban on direct Russian diamond imports in January 2024, which was later expanded to include diamonds routed through third countries.
Alrosa has also been under U.S. sanctions since 2022, further restricting its access to global markets.
Despite being the world’s largest producer of rough diamonds by volume, Alrosa has struggled with rising economic pressures.
With Russia’s central bank holding interest rates at 21%, borrowing costs have surged, forcing many companies, including Alrosa, to scale back investments.
Alrosa’s net debt more than tripled, climbing from 36.1 billion roubles in 2023 to 107.9 billion roubles at the end of 2024.
Its net debt-to-EBITDA ratio also rose sharply, reaching 1.37x from 0.26x. Meanwhile, diamond reserves increased to 129.9 billion roubles, up from 84.3 billion roubles in 2023.
CEO Pavel Marinychev acknowledged the “deep crisis” in the global diamond industry, stating in November that Alrosa had built a financial cushion to withstand current challenges.
He also mentioned the possibility of government support through state diamond purchases.
In response to financial strain, Alrosa plans to cut labor costs, reduce its 35,000-strong workforce, and suspend development of less profitable assets.
These measures aim to help the company navigate the prolonged market downturn.
