LONDON – Sales at De Beers Societe Anonyme rose 10 percent in the six months
to June 30 to $3.74 billion, from $3.402 billion in the same period last
year, the company said in a statement. The company attributed the gains to
an increase in demand, and greater pricing power, for its rough diamonds
from its Diamond Trading Company clients. Some $3.3 billion of the company¹s
sales during the period came from rough diamonds, while the balance came
from its sales of industrial diamonds and supplies to non-site holders.
De Beers said it had also seen high double-digit sales growth at De Beers
Diamond Jewelers, its joint venture with LVMH Moet Hennessy Louis Vuitton.
This was driven by a demand for higher-end and bridal diamond jewelry and
new store openings in cities including Dallas and Tokyo, in the Ginza
district. The company added that it aims to have around 50 stores open by
the end of 2008. Sales for De Beers Diamond Jewelers are not included in the
figures that De Beers SA reports.
Meanwhile, net earnings at De Beers fell 9.7 percent during the period to
$316 million, compared to earnings of $350 million last year. De Beers said
that this was largely due to a 66 percent increase in its tax rate this
year. Its EBITDA rose 31 percent to $831 billion, from $632 billion in the
same period last year, thanks to improved margins and the restructuring of
its loss-making mines.
But despite the rise in sales, and what the company described as a ³robust,²
demand for high-end diamonds, Gareth Penny, managing director of De Beers,
said the company has a cautious outlook for the second half of 2008, in
light of a dip in demand for less valuable diamonds in the U.S.. ³We are
obviously living in uncertain times, and that requires a more cautious
outlook,² said Penny during a conference call Wednesday. ³Mass market retail
jewelry sales have been impacted by economic issues, particularly in the
U.S.. Whilst there has been strong growth in China, India, Russia and the
Middle East, [that] has helped to mitigate, the overall retail market is
likely to remain challenging for the mass market end of the business.²
The company also announced that Gary Ralfe, a former managing director of De
Beers, has retired from the board of De Beers SA. He will be replaced by
Bruce Cleaver.