De Beers expects 4-5 percent rise in diamond demand
July 25, 2014
London--Sales and production increased in the first half of the year for De Beers and the company expects global demand for diamond jewelry to increase 4 to 5 percent this year, driven by the United States and China.
According to results published Friday by London-based parent company Anglo American, total sales for De Beers rose 15 percent to $3.8 billion while rough diamond sales also increased 15 percent, to $3.5 billion.
Operating profit rose 34 percent from $571 million to $765 million.
Production was up 12 percent for the six-month period ended June 30, including a 7 percent increase in second quarter production. Aiding the increased production was the end of the clean-up from the slope failure at Jwaneng and the end of planned maintenance at Orapa, plus the company’s improved ability to the deal with heavy rainfall in South Africa that had been hampering production.
Downstream, De Beers said that Forevermark “continues to grow strongly,” particularly in the U.S., though it provided no specific sales figures for its diamond brand.
The company also reported “healthy like-for-like sales growth,” for De Beers Diamond Jewellers, the chain of retail stores it operates in a joint venture with LVMH, though it noted it has “restructured” its portfolio to focus on fast-growing markets, particularly in Asia.
There now are four De Beers Diamond Jewellers stores in the U.S., in Costa Mesa, Calif., New York, Houston and Naples, Fla.
Looking ahead to the remainder of 2014, De Beers said it expects demand for diamond jewelry to increase 4 to 5 percent, driven by the U.S. and China.
It has increased its production guidance from 30 to 32 million carats to 31 to 31 million carats.
Commenting on the performance of De Beers, Anglo American Chief Executive Mark Cutifani noted the diamond miner’s “upward performance trajectory” but said Anglo American’s business overall has witnessed soft demand and declining prices for the commodities it produces, a reflection of overall economic uncertainty over growth prospects in both developed and developing countries.
“As we look at the global economic outlook, uncertainty is likely to persist for the balance of 2014, though there are some encouraging signs that activity is strengthening in our key markets,” he said.