De Beers hit by drop in full-year sales
De Beers CEO Bruce Cleaver is upbeat despite the lower full-year sales performance
While De Beers CEO Bruce Cleaver sounded an upbeat note for the final sale of rough diamonds for the year, the full-year performance was well below the previous year’s.
But some analysts forecast a strong rebound in 2018.
The provisional sales figure for the 10th and final sale of 2017 was $450m, the second-lowest total for the year in which the first sale reached $729m, a level that was not once challenged by subsequent sales. The 10th sale compared with $422m achieved in the same December period a year earlier and $466m in November 2017.
"The 10th sales cycle saw the continuation of good demand for De Beers’ rough diamonds as we head towards the end of 2017. Demand was broadly stable on the levels seen in cycle nine," Cleaver said.
The provisional $450m number could rise by anywhere between $2m and $11m, based on the variances between the provisional and actual sales numbers in 2017.
Even with a higher actual 10th sales number, 2017’s performance of $5.31bn remains well below the $5.59bn achieved in 2016.
Cleaver noted in October that cutting and polishing factories in India and Israel closed temporarily at the same time for religious reasons during a seasonally quiet time of the year ahead of the ramp-up in rough diamond buying to make jewellery for the year-end selling season.
HSBC estimated De Beers’s rough diamond sales in 2018 would rise 8% year on year to $5.7bn, the highest in two years.
De Beers is the largest producer of rough diamonds by value, with mines in Botswana, SA, Namibia and Canada.
It is 85% owned by Anglo American and 15% by the Botswana government.