De Beers' rough production dips 15% in H1

Rough diamond sales touch $3.1 billion
De Beers' rough production dips 15% in H1

Anglo American announced its Interim Financial Results 2016. In this period, De Beers’ rough diamond production dropped 15 percent to 13.3 million carats (H1 2015: 15.6 million carats), reflecting the decision to reduce production in response to prevailing trading conditions in H2 2015. Owing to continuing depressed markets in key industrial sectors (principally oil and gas), Element Six experienced a challenging first six months.

The company noted that underlying EBIT increased by 2 percent to $585 million (H1 2015: $576 million) following higher revenues from stronger rough diamond demand, tight operating cost control and favourable exchange rates.

Total revenue increased by 8 percent to $3.3 billion (H1 2015: $3.0 billion), mainly driven by higher rough diamond sales, which increased by 11 percent to $3.1 billion.

ForevermarkTM expanded its retailer network to 1,874 outlets (a 6.5 percent increase since the end of 2015) in 38 countries. De Beers Diamond Jewellers maintained its focus on fast-growing markets, with 35 stores in 16 key consumer markets around the world.

Market-wise, the company noted that according to preliminary data, during H1 2016, the US market showed positive growth overall, while the Chinese market was broadly stable. Japan demonstrated modest growth in local currency, whereas consumer demand in India was hampered by a month-long jewellers’ strike in March 2016 against new government regulations.

The company notes that macro-economic conditions underpinning consumer demand for diamonds remain broadly stable in aggregate, but with persistent downside risks looking into H2 2016 (including recent social and political instability). Rough diamond revenues are expected to be weighted towards H1 2016, consistent with prior years and typical of the seasonal drivers.


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