LONDON — Solid demand and strong revenue growth in the first half boosted underlying operating profit at De Beers by 34 percent to $765 million in the first half.
Its parent Anglo-American said in an interim statement Friday that the diamond miner and marketer had also benefitted from favorable exchange rate trends in the six months to June 30.
“Rough diamond demand was robust, reflecting a positive outlook for polished diamonds in De Beers’ key markets of the U.S., China and India. Stronger year-on-year consumer demand between Thanksgiving and Chinese New Year — the key selling season — resulted in higher levels of retailer restocking during the first half of 2014 than in the same period last year,” Anglo-American said.
Overall diamond sales were up 15 percent to $3.8 billion, while rough diamond sales were also 15 percent higher at $3.5 billion.
Anglo-American clarified that the seasonal nature of polished diamond consumption means that De Beers’ annual performance is generally more heavily weighted towards the first six months, reflecting normal restocking by midstream diamond manufacturers after the key selling season.
Forevermark, the De Beers diamond brand that is sold through select retailers in a variety of international markets, continues to grow strongly, particularly in the core markets of China, Japan, India and the U.S., the statement said.
In May, Forevermark was launched in Turkey, and in July, plans were announced to make the brand available in the U.K. and Ireland. It is now available in more than 1,400 authorized jewelry stores in 29 countries. More than one million diamonds have received the Forevermark inscription since the brand’s launch in 2008, the statement said.
De Beers Jewellers, which operates retail stores worldwide, had healthy like-for-like sales growth, having restructured its portfolio of stores to focus on fast-growing markets — particularly in Asia. Sales continue to be boosted by the Chinese, both in Asia and in other luxury shopping destinations worldwide, the company said.
Looking ahead, Anglo-American said De Beers expects to see continued growth in diamond jewelry demand across its key markets this year, driven primarily by the U.S. and China. Other markets are also projected to grow in local currency terms, though dollar-equivalent growth will partly depend on currency fluctuations.
In India, recent parliamentary elections have resulted in improved economic confidence, which is expected to impact positively on both activity in the country’s cutting centers and on rough diamond demand generally.
Production guidance for 2014 has been increased to 31 to 32 million carats, from 30 to 32 million carats.
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