De Beers Reports 12% Rise On Year To 16M Carats In H1

Production guidance for this year has been increased to 31-32 million carats from 30-32 million carats.

Total sales increased by 15 percent to $3.8 billion, of which rough diamond sales were also up 15 percent, to $3.5 billion.

This reflected "diamantaires’ restocking after a successful selling season and a reasonably positive outlook for polished diamonds in the key markets of the US, China and India," the firm said in a statement.

The miner said it had a positive outlook for growth in 2014. "We see global growth in demand for diamond jewelry of between 4-5 percent in 2014, driven primarily by the key markets of the US and China.

"We also expect to see some recovery in India as positive sentiment returns to the market following the result of the recent elections.

"The fundamentals of the industry remain strong, as growing demand will continue to outpace production. With positions across the value chain, De Beers is well-positioned for growth."

The firm said that rough diamond demand was "robust" for the period under review, "reflecting a positive outlook for polished diamonds in De Beers’ key markets of the US, China and India. This contrasted with the first half of 2013, when encouraging growth in the US was not matched in India (where demand was weak). Stronger year-on-year consumer demand between Thanksgiving and Chinese New Year – the key selling season – resulted in higher levels of retailer restocking during the first half of 2014 than in the same period last year".

"The seasonal nature of polished diamond consumption means that De Beers’ annual performance is generally more heavily weighted towards the first six months, reflecting normal restocking by midstream diamantaires after the key selling season. While stocking levels increase as the end of the year approaches, this is offset by manufacturing slowdowns that typically impact upon rough demand in the second half. It is expected that this trend will continue this year."

De Beers said operating profit across the group increased by 34 percent to $765 million "as we benefited from a stronger rough price environment and product mix, together with higher volumes and favorable exchange rates".

On other issues, the firm said it continued to "invest for growth", making good progress on three projects in South Africa (the Venetia underground mine), Botswana (the Jwaneng Cut-8) and Canada (the Gahcho Kue joint venture).

In addition, there had been a "good performance" from its two diamond brands, with Forevermark now available in more than 1,400 jewelry stores in 29 countries. Forevermark launched in Turkey in H1 and announced plans to launch in the UK & Ireland later this year.

And the firm is "continuing to develop our two sales channels", with the announcement earlier this week of the new sales approach for Global Sightholder Sales’ rough diamond customers, and greater flexibility in forward contracts for Auction Sales customers.