NICOLE MORDANT, Johannesburg | Wednesday 12.00pm
DIAMOND giant De Beers on Wednesday posted a 40% increase in annual rand earnings per share and predicted that it will at least match its 1999 gem sales in the current year.
The company made no comment in its earnings statement on the future of its stake in mining group Anglo American Plc. But a De Beers slide obtained at the results presentation confirmed the holding in its sister firm might be changed.
The slide on Anglo said that De Beers’s 35,4% Anglo holding ”was available if necessary to fund investment in the diamond business” — repeating a statement made by De Beers managing director Gary Ralfe last month.
De Beers said it is not a passive investor and added that it will protect its Anglo investment. ”Any change would be done after full consultation with Anglo”, it said.
Shares in De Beers, the world’s biggest diamond producer, swung around from a softer opening, bucking a weaker Johannesburg bourse as the market warmed to the financial news and its sturdy outlook for global diamond sales.
By noon the share stood at R162, up 100 cents or 0,6% on Tuesday’s close.
”The improved mood in the market has continued into 2000,” De Beers said in its statement.
”Barring any significant downturn in economic activity, particularly in the United States, the Central Selling Organisation (CSO) hopes to meet the sales target set for the year of at least the same as for 1999,” the company said.
De Beers sells its diamonds through its London-based marketing arm, the CSO, which last year achieved record rough diamond sales of $5,24-billion.
De Beers posted headline earnings per share (EPS) of 1,291 cents, compared to 919 cents in the previous financial year. In dollar terms, headline EPS grew to US 213 cents from 166 a year ago.
In a surprise move last month, De Beers managing director Gary Ralfe said the firm was mulling selling part of its 35,4% stake in Anglo if new diamond business opportunities presented themselves.
Until then, the Anglo holding had largely been regarded as set in stone. — Reuters