August 12, 1999
De Beers' Earnings Down
A dispute over diamond exports and a continuing lack of consumer confidence in Asia contributed to a 2.9% drop in net earnings for De Beers in the first half of 1999. Net earnings were $326 million, compared to $336 million in 1998.
Income from the combined diamond accounts of the company's two groups, De Beers Consolidated Mines Ltd. and De Beers Centenary AG, was $334 million, the same as the first half of 1998. While income for the De Beers Centenary diamond account was up 17%, De Beers Consolidated Mines declined by 8%. The mines lost some $100 million in exports during a dispute with the South African government diamond valuator, holding up diamond exports for several weeks. Regular exports still haven't resumed. (Read related story.)
While there are signs of recovery in Southeast Asia, De Beers' Central Selling Organisation is still relying heavily on the U.S. market, the company said in a statement. Consumer confidence remains low in Japan, but some restocking helped fuel imports of polished diamonds there this year. The CSO anticipates millennium celebrations and its accompanying Millennium branding program will boost retail sales for the rest of 1999.
- by Stacey King