March 11, 1999
De Beers' 1998 Earnings Dropped
De Beers Consolidated Mines Ltd. and De Beers Centenary AG announced a 40% decrease in earnings for the year ended Dec. 31, 1998. In U.S. dollars, the amounts dropped from $619 million in 1997 to $374 million in 1998. Total net earnings (after deducting retained earnings of associates) showed an even larger slide of approximately 50% from 1997.
De Beers directors attribute the losses to difficult market conditions throughout 1998, noting the Central Selling Organisation's sales for the year were 28% below 1997 sales. While De Beers analysis showed the U.S. market remained strong throughout 1998, increases in diamond sales of 9% here and 4% in Europe were offset by a 19% decrease in Japan and 35% decreases in other Asian markets.
De Beers says its future looks brighter. It cites a good 1998 Christmas season in the U.S., a tightening of diamond supplies due to a restrictive CSO sales policy and a reduction of supply from other sources. It also points to agreements forged with Russia. De Beers says it remains cautious about Asian markets. It will not increase sales of rough diamonds significantly unless Asian economies improve or if new markets develop for the diamonds previously earmarked for Asia.
- by Robert Weldon, G.G.