Russian state-controlled diamond miner ALROSA announced earnings of RUB 214.5 billion ($3.6 billion) and a net profit of RUB 61.9 billion ($1.04 billion) for the first nine months of 2017. The revenue figures are 16 percent below the RUB 255.6 billion ($4.3 billion) registered over the first nine months of 2016, while net profit is a hefty 47 percent down from the RUB 116.9 billion ($1.96 billion) recorded during the same period last year.

The fall in revenue and profit comes despite the company having sold 31.8 million carats of rough diamonds during the period, 6 percent more than the 30 million carats sold over the first nine months of last year.

ALROSA said the weaker financial performance was due to a 15 percent appreciation of the ruble against the US dollar coupled with a 12 percent decrease in the average price of diamonds sold, mainly as a result of changes in the diamond mix. The company said net income was also adversely affected by an impairment of RUB 7.4 billion ($124 million) in fixed assets lost in the accident at the Mir underground mine.

ALROSA sold 7.5 million carats of rough diamonds from a total production of 10.2 million carats, generating revenue of RUB 58.9 billion ($988 million) in the third quarter ended September 30. Sales in carat terms were down 6 percent, while revenue was down 16 percent in a year-on-year comparison with the third quarter of 2016.

Company Chief Executive Sergey Ivanov commented, ”ALROSA’s nine-month 2017 results remained subdued by macroeconomic and market factors beyond the company’s control. At the moment, we are witnessing a moderate resurgence in the diamond market. Implementing our efficiency improvement initiatives has helped to cut unit production costs.”

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