DE BEERS, the supplier of about a third of the world’s rough diamonds, has reported a 27 per cent increase in sales last year on higher demand for the luxury gems in the US, China and India.
Sales of unpolished and uncut diamonds by Diamond Trading, De Beers’s trading arm, rose to $6.5 billion from $5.1 billion a year earlier, the Johannesburg-based company said yesterday in a statement.
Average prices increased 29 per cent during the year, pushing net income to $939 million from $546 million. The results came as output declined 5.2 per cent to 31.3 million carats.
“We expect to see continued growth in global diamond for jewellery sales, albeit at lower levels than the exceptional 2011 growth,” the company said in the statement.
Production is expected to remain stable this year despite continuing uncertainty in the market, said chief executive Philippe Mellier, a mechanical engineer who took the reins at De Beers last year after a lengthy search by the company to fill the top job.
De Beers, whose largest shareholder Anglo American is boosting its stake to as much as 85 per cent, has benefited from rising demand in Asia’s emerging markets, where economic growth outpaces the global average.
Rough-diamond prices probably rose an average 15 per cent last year as producers struggled to keep pace with consumption, RBC Capital Markets said in January.
In November, 45 per cent shareholder Anglo bid $5.1 billion to buy the Oppenheimer family’s 40 per cent in De Beers. The Botswana government, which holds the remaining stock, said last month it might say in March whether it would exercise an option to increase its holding to 25 per cent.
The sale is expected to be completed by the end of the third quarter, Mr Mellier said.
Profit before interest, tax, depreciation and amortisation rose 21 per cent to $1.7 billion.
OAO Alrosa, De Beers’s biggest global competitor, expects to report a 29 per cent increase in 2011 sales to a record $4.45 billion, the company said in December. RBC Capital Markets that month had forecast De Beers sales of about $6.4 billion.
De Beers mines diamonds by itself and in joint ventures in South Africa, Canada, Botswana and Namibia. – (Bloomberg/ Reuters)
