De Beers Posts 21% Drop in Rough Sales in First Half

Finance and Trade
24/07/2015 10:25

The miner, the star performer last year for parent company Anglo-American plc which owns 85% of De Beers, posted a 21% drop in total sales to $3.0 billion, and an identical decline in rough sales to $2.7 billion. Rough diamond output was 15.6 million carats from 16.0 million carats a year before, however the average price per carat increased to $206 from $192 due to a stronger product mix.

"Given the challenges faced in the midstream during the first half of 2015, rough diamond demand is likely to remain constrained for the year as a whole, with demand conditions in the second half of the year dependent upon the level of retailer restocking that takes place. Production guidance for 2015 has been revised to 29 to 31 million carats (on a 100% basis), subject to trading conditions.

"Rough diamond demand in the second half of the year will be dependent upon the level of retailer restocking that takes place in preparation for the main jewelry selling season in the fourth quarter. In the meantime, working capital concerns in the midstream are likely to cause some short-term volatility in rough diamond demand. Global demand for diamond jewelry (in US dollar terms) is predicted to be stable in 2015. Downside risks remain, especially related to diamond jewelry demand growth in China, as the country grapples with slower economic growth and asset price challenges."