29 Jul 2019

The first half of the year has presented challenging conditions for rough diamond sales, says the executive vice president of the De Beers Group, Mr Paul Rowley.

Giving interim financial results for the first half of 2019 during a media roundtable in Gaborone recently, Mr Rowley explained that the challenging conditions were due to a combination of cyclical and macro-economic challenges.

Mr Rowley said total revenue decreased by 17 per cent to US$2.6 billion, and that rough diamond sales declined by 21 per cent to US$2.3 billion.

He further said EBITDA decreased by 27 per cent but still achieved profitability of US$518 million due to the challenging midstream trading environment and slowing consumer demand.

Furthermore, he noted that consolidated rough diamond sales decreased by 13 per cent to 15.5 million carats while the average rough price index decreased by 4 per cent.

Mr Rowley said there were a number of factors that contributed to the reduction in diamond sales, including the fluctuating nature of the diamond industry.

He also attributed the decrease in sales to the trade wars between the United States and China, and the lack of a trade deal which had created uncertainty in the market.

However, he said despite the challenges, they had experienced significant new growth projects, mentioning the Cut-9 project in Jwaneng.

He also said in Namibia, they were investing in a mining recovery vessel to the tune of US$500 million and that they had seen indications of a new Kimberlite pipeline in their Canada operation. Mr Rowley further said they continued to invest and had made progress in upgrading and expanding their network.

He pointed out that a new store was opened in Miami and that the store in Shanghai was renovated. He added that the brand now had 20 stores plus 12 franchise stores in 16 countries.

For her part, the executive vice president, commercial and partnerships, Ms Alessandra Berridge explained that De Beers had adopted a diamond tracking initiative called TRACR.

Ms Berridge said it was the first diamond digital platform which digitally traced a diamond from the mine to a retail store in an effort to ensure a sustainable future for the industry.

She said the platform would enhance consumer confidence in De Beers diamonds by ensuring all registered diamonds were conflict-free and natural while also improving efficiency across the sector. ENDS