Russia’s sanctions-hit diamond producer Alrosa reported a 25% fall in first-half revenue on Tuesday, warning that geopolitics and macroeconomic uncertainties were weighing on demand as high interest rates, inflation and taxes exert pressure on profits.
Group of Seven countries banned direct imports of Russian diamonds in January 2024. This was followed by a European Union and G7 ban on imports of Russia-origin diamonds via third countries. Alrosa itself has been under U.S. sanctions since 2022.
Alrosa’s full-year profits fell sharply in 2024, but the first half of 2025 showed signs of recovery, with net profit up 10.8% year-on-year to 40.6 billion roubles ($506.7 million).
Revenue fell 25% to 134.3 billion roubles and core earnings (EBITDA) dropped 42% to 37.1 billion roubles, Alrosa said.
Net debt jumped almost 10 times to 61 billion roubles, Alrosa’s results filing showed, but the company’s cash, cash equivalents and bank deposits rose 8.4% to 115.4 billion roubles.
“The relatively high level of the key rate and inflation continued to have an additional negative impact on the (group) in the first half of 2025,” Alrosa said, pointing to rising costs for materials and fuel.
Russia’s central bank has maintained elevated borrowing costs for several months, but has started an easing cycle, most recently trimming rates to 18% from 20% in late July.
Alrosa’s first-half profits were boosted by the sale of its stake in Angolan state-controlled diamond miner Catoca, for which Alrosa said it received 15.9 billion roubles.
A subsidiary of Oman’s sovereign wealth fund replaced Alrosa, the world’s largest producer of rough diamonds by volume, as a shareholder in Catoca under a deal formalised in May.
Angola had been under pressure to cease its long-standing partnership with Alrosa since the West imposed sanctions over Moscow’s February 2022 full-scale invasion of Ukraine.
Prior to the deal, Alrosa held a 41% stake in Catoca, with the remaining shares owned by Endiama EP, Angola’s national diamond company.
($1 = 80.1200 roubles)
(Reporting by Gleb Stolyarov and Alexander Marrow. Editing by Mark Potter)
