Advanced Search

Weaker Product Mix Dents De Beers Sales

Jul 27, 2017 4:35 AM   By Rapaport News
Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share

 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
Tags: Anglo American, Canada, China, De Beers, element six, India, Indian manufacturers, Rapaport News, Snap Lake
Similar Articles
De Beers 600De Beers Buys Peregrine Diamonds for $81M
Jul 19, 2018
De Beers’ Canada business has agreed to acquire exploration company Peregrine Diamonds, which owns the promising
Comments: (0)  Add comment Add Comment
Arrange Comments Last to First
© Copyright 1978-2018 by Martin Rapaport. All rights reserved. Index®, RapNet®, Rapaport®, PriceGrid™, Diamonds.Net™, and JNS®; are TradeMarks of Martin Rapaport.
While the information presented is from sources we believe reliable, we do not guarantee the accuracy or validity of any information presented by Rapaport or the views expressed by users of our internet service.