De Beers’ group rough diamond sales in H1 rise 30%

Diamond mining major De Beers’ group sale of rough diamonds in the six months ending June valued $3.89 billion rising 30 percent y-o-y. The sale of rough diamonds through the Diamond Trading Company (DTC) grew 33 percent y-o-y to $3.5 billion. The company attributes the35 percent increase in price of its rough diamonds to contribute to its increased sales. Also, the sales closed a record as the highest sales figure recorded for the first half of the year, buoyed by continued retail demand from the Indian and Chinese consumer markets and stronger than expected demand in America.

Net earnings increased 72 percent to $694 million and earnings before interest, taxation, depreciation and amortization (EBITDA) stood at $1.18 billion after a 55 percent increase. There was a 26 percent increase in cost of sales to $3.07 billion, but the operating costs, including exploration, marketing and technical services, fell 10 percent to $200 million. Production at the company was more or les similar to last year - 15.534 million carats in H1 of 2011 from 15,43 million in the corresponding period last year.

There has been an active expansion in the company’s downstream activities, represented by the robust expansion of the diamond brand Forevermark into markets in Far East, India and the Caribbean, a small launch in the U.S. so far, with a more strong US expansion planned in the following six months. The De Beers joint venture with LVMH, namely Diamond Jewellers (DBDJ) has launched in China in the first half of this year and is committed to expanding in the Far East. Element Six, the industrial and synthetic diamond subsidiary, saw its performance impacted by operational challenges and a weaker dollar, but posted a “good first-half performance in respect of both sales and profitability,” as the company stated.

For the period ahead, the company is projecting a positive outlook ‘despite the ongoing turmoil with the global economy’, it seems ‘encouraged by the continued strong growth in price and demand during the first six months of 2011’. It is confident that the exceptional growth in retail markets in India and Asia will continue to drive demand for diamonds and based on the recent JCK trade show, indicators point to a robust demand during the Christmas season in the US, and Diwali in India.

Also, Philippe Mellier was appointed CEO of the De Beers Group at a De Beers sa Board Meeting in Luxembourg on 19th July 2011,. After almost 20 years with De Beers Group, Stuart Brown (Chief Financial Officer), announced that he would be stepping down from the Board with effect from the end of July.