De Beers, the world’s biggest diamond company, said on Friday that diamond sales retreated in 2006 for the first time for six years owing to weak demand.
However, in an upbeat outlook the company looked to the emerging economic superpowers of China and India for future growth.
De Beers said that sales had fallen by 6% last year to $6,15-billion, compared with $6,54-billion in 2005, the group said in an annual earnings statement.
The subdued performance reflected reduced Russian supplies and a challenging wholesale market environment, added De Beers.
Full-year net profits meanwhile jumped 32% to $730-million last year, from $554-million in 2005, after the group sold its 26% stake in De Beers Consolidate Mines to black empowerment entity Ponahalo.
Stripping out the effect of that sale, net profits slumped 44% to $453-million last year.
De Beers is 45% owned by London-listed miner Anglo American. The Oppenheimer family hold 40% while the state of Botswana owns the remaining 15%.
The company said however that consumer demand for diamond jewellery resulted in strong sales in China and India while the US also grew.
Looking to the future, De Beers said that ”the outlook for further growth in retail diamond jewellery sales remains positive, with India and China likely to be the leading growth markets, and the US continuing its five-year growth trend”.
Sales were likely to be constrained by availability in 2007, owing to the reduction in Russian purchases the company agreed with the European Union, the company continued.
However the group was expected to benefit from new production coming on-stream at the end of the third quarter of 2007. – Sapa-AFP