De Beers profits up 72%

2012-02-10 09:25

The world’s top diamond producer, De Beers, announced an “exceptional” year today, with profits up 72% to $939 million in 2011, on surging consumer demand.

Total sales rose 26% to $7.38 billion, even though production slipped to 31.3 million carats, down 5% from 2010.

“Our total sales for 2011, our second highest since privatisation, were boosted by exceptional rough diamond price growth fuelled by almost unprecedented consumer demand during the first half of the year,” De Beers chairperson Nicky Oppenheimer said.

“The second half of the year saw a reduction in the rate of growth, as cutting and polishing centres found it increasingly difficult to secure debt financing from banks focused on shoring up their own balance sheets.”

De Beers’ new CEO Philippe Mellier said 2011 was an “exceptional year” with consumer demand up by 11-13%, fed by increased consumer demand for jewelry in China, India and the United States.

Rough diamond prices were up 29%.

“In spite of uncertainty, and barring a global economic shock, we expect to see continued growth in global diamond jewellery sales, albeit at lower levels than the exceptional growth seen in 2011,” Mellier said.

“This will be driven by the overall strength of the luxury goods market, improving sentiment in the US (the largest diamond jewellery market), continuing growth in China, and the positive impact of the 2011 polished price growth on retail jewellery prices.”

De Beers produces and sells about 35% of world’s rough diamonds from its mines in South Africa, Botswana, Namibia and Canada.

Officially headquartered in Luxemburg, the company is run from London and Johannesburg.

Global miner Anglo American holds 45% of the company, and is buying the 40% stake held by the Oppenheimer family, in a deal announced in November.

The remaining 15% is held by the government of Botswana.

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