04 Feb 2023
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De Beers’ total sales up 11% in 2014
Production up 5%
By: Diamond World News Service
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Feb 14 2015 12:56PM
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Reference: 11170  

DecreaseIncrease
Anglo American noted De Beers’ financial performance for 2014 recorded good increase in sales and production. “The performance of our diamond business, De Beers, is a clear demonstration of the benefits and value of our diversified business model. The integration of De Beers into Anglo American is complete; De Beers contributed $1.4 billion of underlying EBIT in 2014, 28 percent of – and the second largest contributor to – the Group’s total, and delivered a 15% return on capital employed (ROCE), the company noted.

Sales

Total sales rose 11 percent to $7.1 billion. Rough diamond sales increased 12 percent to $6.5 billion. Higher rough diamond revenue was driven principally by a 12 percent increase in consolidated sales volumes to 32.7 million carats. % Average realised diamond prices were in line with 2013 at $198/carat, driven by 5 percent higher average rough price index in 2014, offset by a marginally lower product mix.

Production

De Beers’ full year production increased 5 percent to 32.6 million carats (2013: 31.2 million carats) reflecting a strong performance from Debswana, partly offset by slightly lower production at Snap Lake and Kimberley, with all other regions performing broadly in line with 2013.

Debswana benefited from greater efficiency at its processing plants following operational improvement initiatives, producing 24.2 million carats (Orapa 12.9 million and Jwaneng 11.3 million).

In Namibia, production was marginally higher at 1.9 million carats. Namdeb production was broadly in line with the previous year, despite a 19-day strike in the third quarter. Namdeb Holdings has received a 15-year license extension for both land and sea operations to 2035.

In South Africa, a 2 percent decrease in output to 4.6 million carats, was principally due to lower grades at Kimberley. In Canada, production was slightly lower at 1.8 million carats (Snap Lake 1.2 million and Victor 0.6 million). Element Six (E6) enjoyed a year of solid growth, with a strong performance in the synthetic industrial diamond product groups, both for abrasives and advanced technology applications. This growth was offset partially by weakness in tungsten carbide sales in the first six months.

Market-wise

Consumer demand for diamond jewellery showed positive growth in local currency terms in all the main markets in 2014. The economic recovery gained momentum in the US, resulting in healthy diamond jewellery sales growth throughout the year. Growth in diamond jewellery demand in China continued, albeit at more modest levels, reflecting slowing economic growth. Macro-economic conditions in India started improving in the final quarter of 2014, following the election of a new government earlier in the year, which boosted consumer confidence, lifting hopes that growth will return.

Forevermark

De Beers’ brand Forevermark saw strong growth in 2014, with retail outlets up by 20 percent, bringing its presence to over 1,500 outlets in 34 markets. Since its launch until now, more than one million diamonds have received the Forevermark inscription and unique identification number. There are now 35 De Beers stores in 12 key consumer markets around the world.

Outlook

Diamond production (on a 100% basis) for 2015 is forecast to be in the range of 32 to 34 million carats, subject to market demand.

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