Professional Jeweler Archive: De Beers: Rough Sales Rise 3% in 2004

April 2005

News | Diamonds

De Beers: Rough Sales Rise 3% in 2004

DTC diamond prices for its clients weigh in 14% higher on average than in 2003

By Peggy Jo Donahue

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De Beers announced in February that its Diamond Trading Co. reported rough diamonds sales totaling $5.695 billion in 2004, only 3% higher than in 2003. Analysts had expected they would be higher. De Beers also reported an additional $512 million in “other” diamond sales for 2004, mostly polished goods. The company’s total diamonds sales – rough and other – came to $6.2 billion.

Headline earnings for De Beers totaled $652 million, up 11% from $590 million in 2003. Net profits were $498 million, up about 25% from $398 million. De Beers reported that diamond stocks at year-end were at a similar level to that reported at the end of 2003.

During the year, DTC raised its rough diamond prices three times, which De Beers said resulted in an average 14% increase. DTC said its first allocation of diamonds in 2005 was strong and reflected an additional 3% price increase on rough because of growth in demand achieved in 2004 and anticipated for this year.

De Beers said preliminary indications are that global retail sales of diamond jewelry were about 6% higher overall in 2004 in local currency and, because of the continued weakening of the U.S. dollar, about 8% higher in U.S. dollars.

The U.S. – which accounts for over 50% of world diamond jewelry sales – had a solid Christmas season overall, said De Beers. (The U.S. Census Bureau reported retail sales of all jewelry for December 2004 rose 2%, from $6.6 billion in 2003 to $6.7 billion in 2004. Total 2004 jewelry store sales in the U.S. increased 5% to $28.3 billion.)

De Beers also reported its mines produced 47 million carats in 2004, and increase of 7% – or 3 million carats – from 2003.

Rough diamonds are courtesy of Leo Schachter Diamonds, New York City.

Photo by Robert Weldon.

Copyright © 2005 by Bond Communications