Russia's Alrosa posted a loss for the first time in six years
The Russian state-owned diamond mining company Alrosa ended the first half of 2026 with a loss of 9.5 billion rubles. The company, which accounts for about 90% of Russia’s diamond production, posted a loss for the first time in six years.
Alrosa’s results are based on its financial statements prepared in accordance with International Financial Reporting Standards (IFRS) for January–June 2026. During this period, the company reported a net loss of 9.5 billion rubles. The last time Alrosa ended a similar period with a loss was in 2020, during the pandemic. The company’s financial performance has deteriorated significantly. Revenue for the year fell by 33%—to 90.3 billion rubles, excluding subsidies.
Gross profit plummeted by nearly three times—to 14.1 billion rubles. EBITDA, a metric used to assess the company’s core operating performance, fell by 61% to 14.3 billion rubles. The problems are evident not only in the income statement. The company is also spending more money than it is earning.
In the first half of the year, Alrosa’s cash gap amounted to 16.9 billion rubles. Over the past 12 months, this figure reached 33.2 billion rubles. “Alrosa is currently in a difficult situation,” noted analysts at Vector Capital. The company itself attributes the decline in results to several factors. These include geopolitical and economic instability, a prolonged decline in diamond inventories among cutters and retailers, and the strengthening of the Russian ruble against the dollar.
“During the reporting period, the diamond industry continued to face pressure from several factors, such as geopolitical and macroeconomic uncertainty, a prolonged cycle of declining diamond and rough diamond inventories in the cutting and retail sectors, as well as the strengthening of the ruble against the dollar, which led to a decline in revenue in the first half of 2026,” according to Alrosa’s report.
The company has been subject to Western sanctions since 2022. Nevertheless, Alrosa remains one of the largest players in the global diamond market, accounting for about 30% of global diamond production. But production volumes continue to decline. In 2025, Alrosa reduced production by 10%—to 29.8 million carats.
In 2026, the company expects an even sharper decline. The forecast is 25–26 million carats, meaning production could fall by another 13–16%. However, the problem isn’t limited to production. Alrosa’s warehouses are accumulating inventory that the company cannot sell quickly. At the end of the first half of the year, unsold diamond inventory was valued at 150.84 billion rubles. A year earlier, this figure stood at 148.45 billion rubles.
Analysts at Vector Capital point out another important issue—the company has become unprofitable specifically in its core business. Alrosa’s operating loss for the first six months amounted to 6 billion rubles. This means that the problems now directly affect the diamond business itself, rather than just isolated financial factors. To cut costs, Alrosa has already begun implementing cost-saving measures. Last year, the company reduced salaries by 10% for employees not directly involved in mining. Some employees were switched to part-time work.
The company has also suspended operations at certain deposits, including Verkhnyaya Muna and two sites at “Anabar Diamonds.” In June, Alrosa decided to mothball mining operations at the Severalmaz enterprise. The company accounts for about 10% of Russia’s diamond production. Analysts warn that the situation could worsen if market conditions do not change.
“Current cash flow no longer allows the company to simultaneously finance capital expenditures and service its debt without difficulty,” Vector Capital noted. The company still has a reserve of liquidity, that is, available funds. However, under the current circumstances, its financial stability may continue to weaken.
Thus, Russia’s largest diamond mining company is simultaneously facing a drop in sales, a decline in production, a buildup of unsold inventory, and a growing financial burden. These problems have arisen after several years of operating under sanctions, according to Russian media reports.
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