De Beers profits lose their sparkle

12 April 2012

PROFITS halved at De Beers last year as the economic downturn hammered diamond sales. But the world's biggest diamond producer said the market started 2002 in a more optimistic mood.

De Beers, 45%-owned by mining giant Anglo American, reported net earnings of $837m (£585m) before one-offs, from $1.707bn in 2000. Sales of rough diamonds plunged 21% to $4.45bn. Analysts had expected sales of $4.2-$4.4bn because of slumping demand in the US, exacerbated by the 11 September attacks.

Retail sales over Christmas were above expectations, and in the crucial US market they looked to be better than Christmas 2000.

The rough diamond market began 2002 on a more positive footing, De Beers added. But sales for the year would depend on the timing and extent of any global recovery and the level of polished gems the trade was prepared to carry. 'Stocks of rough diamonds in the cutting centres are low,' it said. 'Although there is still an overhang of polished (stones) in the pipeline, this is less than at the same time in 2001.'

De Beers was taken private last May and is owned by a consortium including South Africa's wealthy Oppenheimer family, the Botswana government and London-listed Anglo. It said the changes meant the latest financial figures were not strictly comparable with those reported for 2000.

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