Despite five of its seven South African mines operating at a loss, De Beers announced on Thursday that 2004 had been another good year for diamond sales.
Declaring its end of year results, the diamond giant said that against a background of accelerating economic growth in the major diamond-buying countries, diamond jewellery sales had performed well.
”Preliminary indications are that global retail sales of diamond jewellery for the year… were about six percent higher than the previous year in local currency, and… about eight percent higher in US dollars,” the company reported in a statement.
It said strong areas of growth were the Asia-Pacific, India and Gulf regions, with Japan also recording modest growth for the second year running.
The US, which accounted for over half of world diamond jewellery sales, had reported a solid Christmas season overall, despite concerns over high personal debt levels.
De Beers also noted 2004 had seen strong demand for rough diamonds from cutting centres. Full-year sales by the Diamond Trading Company (DTC) — De Beers’s marketing arm — stood at $5,695-million — up three percent on 2003.
This was despite DTC raising diamond prices three times in 2004. Diamond prices ended the year 14% higher than the previous year.
De Beers said production for the year as a whole, inclusive of its joint ventures in Botswana and Namibia, totalled 47-million carats — three million carats (seven percent) more than in 2003.
Debswana produced a record 31,1-million carats — two percent more than the previous year, despite industrial action having taken place.
Namdeb’s production of 1,86-million carats was 28% higher than in 2003, and included record marine production of 865 000 carats.
De Beers’ South African mines produced a total of 13,7-million carats in 2004, an increase of 1,8-million carats (15%) on 2003.
”Kimberley mines produced a record two million carats, a production level last achieved 90 years ago, in 1914,” De Beers said.
But it warned that although rand mining costs per ton in 2004 were lower than in 2003, the weakness of the US dollar had put its older and more marginal mines under continued pressure, with five of its seven mines operating at a loss.
”Management continues to focus its efforts on further reducing costs, and driving efficiencies throughout its operations,” it said.
Headline earnings last year were $652-million, 11% higher than for 2003.
Operating cash flow generated during the year was $985-million.
”The board has recommended to the shareholders that a final ordinary dividend of $200-million in respect of the year 2004 be declared at the forthcoming annual general meeting.”
This, together with the interim ordinary dividend of $250-million paid in August last year, lead total ordinary dividends for the year amounting to $450-million, up $50-million on the previous year, De Beers said. – Sapa