Alrosa has expressed concern about the impact of the United States' punitive measures following the publication of its best annual results in five years last month.
According to the Russian miner, revenue would increase by 51 percent to RUB 326.97 billion ($2.99 billion) in 2021 as the diamond market recovers from the dip that occurred the previous year. This resulted in a net profit of RUB 91.32 billion ($834 million), about three times the number for 2020, which was RUB 32.25 billion ($297.3 million).
The repercussions from Russia's invasion of Ukraine has, however, emerged as the most serious issue for the corporation, with the United States putting sanctions on Alrosa and its CEO, Sergey Ivanov, as a result of the invasion. This prevents American companies from granting credit to the miner as a result. In addition, numerous Russian banks have been barred from participating in the Swift international payment system by an alliance of Western governments.
“These sanctions are preventing the group from obtaining financing from persons and entities connected to US and from effecting payments through sanctioned banks,” According to Alrosa's financial results statement.
Management stated that it will continue to do business as usual and “service its obligations,” but cautioned that the impact of the actions was unpredictable at this time.
Revenue declined by 28 percent year on year to RUB 70.73 billion ($642.7 million) in the fourth quarter of last year, suggesting an adverse contrast with the fast market recovery a year earlier as well as a scarcity of goods for the company to sell. Russian authorities reported a 43 percent drop in profit to RUB 12.14 billion ($111.1 million).
Because rough diamonds are in short supply around the world, Alrosa increased its production prediction for 2022 by a small amount, expecting output of 34.3 million carats, compared to earlier guidance of 33 million to 34 million carats.
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