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De Beers presents interim results – 2008
Witnessed 10% increase in sale of roughs in HI-2008
By: Diamond World News Service
Aug 1 2008 3:05PM
Reference: 2884  


Announcing its interim results for 2008, De Beers has revealed that the company has reported solid earnings growth backed by increasing sales across its business. It has also announced that carat production at 24.2 million was only marginally behind 2007 in spite of energy challenges in southern Africa.

While De Beers posted total sales of US$3.74 billion during H1 2008 as compared to US$3.4 billion during H1 2007, its sales of rough diamonds in H1 (including those through joint ventures) were US$ 3.3 billion, which has been10% higher than H1 2007. The increase has been attributed to the demand from the company’s clients that enabled DTC to steadily increase prices during the period.

Beneficiation in Action:

The report also mentioned De Beers completing and handing over a new US$83 million diamond valuing and sorting facility in Gaborone, the largest and most sophisticated of its kind in the world, home to DTC Botswana. In H1 2008 the DTC supplied approximately US$637million worth of rough diamonds to 16 clients operating in Botswana, 11 in Namibia and 17 in South Africa and approximately US$13 million to the State Diamond Trader in South Africa. Following an agreement in principle reached with the Government of Ontario, 10 percent of Victor Mine’s production, by value, will be made available for local cutting and polishing in Canada, an arrangement which mirrors that for Snap Lake in the Northwest Territories.

Downstream initiatives:

De Beers Diamond Jewellers (DBDJ) has seen high double digit sales growth on 2007, driven by the Bridal and High-End diamond categories, and network expansion to 32 stores worldwide. The Forevermark brand announced plans to launch in selected jewellers in Hong Kong and China in Q4 2008 and in South Africa, Japan, India and Taiwan in H1 2009. Forevermark will also open its own independent grading operations (exclusively for Forevermark diamonds) in Belgium and the UK, with further new locations planned for 2009/10.

Future Outlook:

Although the interim results are encouraging, De Beers spells out a mild caution – ‘Even as economic conditions require a more cautious outlook for the second half of 2008.’ Mass market retail diamond jewellery sales have been impacted by economic issues in the most important market, the United States. While strong growth in China, India, Russia and the Middle East has helped to mitigate the impact of the U.S. slowdown, the overall retail market is likely to be challenging. While demand for high-end diamonds is likely to remain robust, the smaller, lower qualities, which are more dependent upon US demand, are expected to remain subdued.

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