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Weaker Product Mix Dents De Beers Sales
Jul 27, 2017 4:35 AM
By Rapaport News
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RAPAPORT... De Beers’ revenue fell in the first half of 2017 as
restocking by Indian manufacturers resulted in the miner selling a greater
proportion of lower-value goods than a year ago.
Total revenue declined 4% to $3.13 billion, with
rough-diamond sales down 6.5% to $2.9 billion, De Beers’ parent company Anglo
American reported Thursday. The average selling price decreased 12% to $156 per
carat, while sales volume grew 7% to 18.4 million carats.
“This reflected stronger demand for lower-value goods in
[the first quarter of 2017] following a recovery from the initial impact of
India’s demonetization program in late 2016,” Anglo American said.
However, a 4% year-on-year increase in the miner’s average
rough-price index, which measures like-for-like price changes, partly
compensated for the lower-value product mix, it added.
Underlying earnings before interest and taxes (EBIT)
declined 6% to $548 million, though underlying EBITDA — which also discounts
depreciation and amortization — increased 3% to $786 million, mainly because of
savings resulting from the closure of the Snap Lake mine in Canada and other
efficiency measures. A stronger performance by Element Six, De Beers’
industrial-diamond unit, also contributed to the rise in EBITDA.
“Sentiment in the midstream remains positive following a
reasonable retail season [in the fourth quarter of 2016], with evidence of
Chinese retailers restocking and demonetization in India having less impact than
anticipated,” the miner continued. “This has supported good demand for De
Beers’ rough diamonds.”
Image: Diamond Producers Association |
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Tags:
Anglo American, Canada, China, De Beers, element six, India, Indian manufacturers, Rapaport News, Snap Lake
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