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De Beers’ revenues up 4% in 2018

25 February 2019


The De Beers Group of Companies reported a 4 percent increase in total revenues in 2018 to US$6.1 billion on the back of improved market demand.

According to the company, diamond sales rose 4 percent, fuelled by improved overall consumer demand for diamond jewellery and a 1 percent increase in the average rough diamond price index.

The average realised price increased by 6 percent to US$171 a carat from US$162 a carat in 2017. “This reflects the lower proportion of lower-value rough diamonds being sold in the second half, which resulted in a 2 percent decrease in consolidated sales volumes to 31.7 million carats,” De Beers said.

Other revenues also increased owing to improved “high-end” jewellery sales at De Beers Jewellers, partly offset by a 5 percent decrease in Element Six’s revenue due to a reduction in sales to the oil and gas market.

Underlying EBITDA was down by 13 percent, with the company saying it undertook incremental expenditure on a number of new initiatives, including the launch of Lightbox Jewelry, Tracr™ and Gemfair™, as well as increasing expenditure in marketing, exploration and evaluation in Canada and increasing provisions in respect of closure obligations.

Preliminary data for 2018 indicated an improvement in global consumer demand for diamond jewellery, with global growth during the first half of the year being driven by solid US and Chinese consumer demand. In the second half however, while the US maintained its growth rate, increased political and policy uncertainty and stock exchange volatility led to a general slowdown of demand. Chinese demand also slowed following the escalation in US-China trade tensions, slower economic growth and stock market volatility. In India, the significant depreciation of the rupee reduced local demand in US dollar terms.

“Although current economic forecasts remain positive, the outlook for 2019 global diamond jewellery consumer demand faces a number of headwinds, including the risk of a potential intensification of US-China trade tensions, the Chinese government’s ability to rebalance economic growth towards consumption, and further exchange rate volatility,” the company said.

Production in 2019 is expected to be in the range of 31 to 33 million carats, subject to trading conditions, added De Beers.