OWN CORRESPONDENT, Johannesburg | Wednesday 4.00pm
SHARES in diamond giant De Beers lost nearly 3% on Wednesday after the firm announced first half results at the bottom end of analysts’ forecasts.
De Beers posted a 30,6% drop in combined headline earnings in the six months ending June 30 to $281-million, cutting earnings per share to $0,73 from $1,06 previously. It maintained its interim dividend at 27,4 US cents.
Analysts contacted by Reuters had estimated headline earnings per share of between $0,75-$1,10.
”The results are slightly worse than expected,” said a dealer on the Johannesburg Stock Exchange.
De Beers shares fell R4,20 to R161.
The company, which owns 35,4% of Anglo American Plc, has been hit by a reduced dividend from Anglo American and by a disruption in diamond exports after a dispute with South Africa’s government diamond evaluator (GDV).
The face-off with the GDV has not been fully resolved despite a breakthrough at the end of June which enabled the firm to export roughly 70% of its last export consignment.
De Beers’ diamond account, its profits from diamond sales, in the first half of the year was unchanged compared with the corresponding period in 1998 at $334-million, helped by strong sales by its London-based marketing arm, the Central Selling Organisation (CSO).
The CSO posted a 43,9% year-on-year gain in sales to $2,44-billion in the first six months of the year, fuelled by strong US retail sales, a recovery in Asia and low inventory levels in cutting centres.
De Beers controls the bulk of the world diamond market through the CSO which buys and stockpiles diamonds when demand is weak and sets production quotas. — Reuters