Sparkling Results

De Beers revenue up 30% to $6.1bn on stronger demand.

- Ilan Solomons

Higher revenues contributed to a 42% improvement year-on-year in diamond miner De Beers’ underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) to $1.4-billion in 2016.

A 30% increase in revenue to $6.1-billion was driven by stronger rough diamond demand, which led to reduced inventory levels, thereby reflecting improved trading conditions, compared with conditions experienced in the second half of 2015.

Rough diamond sales increased by 37% year-on-year to $5.6-billion as a result of a 50% increase in consolidated sales volumes to 30-million carats from 19.9-million carats in 2015.

This was partly offset by a 10% decrease in the average realised rough diamond price to $187/ct from $207/ct in 2015, which reflected in the 13% lower average rough price index, which was, however, offset to “some extent” by an improved sales mix.

De Beers last week said its results for the 2016 financial year also benefited from cost-saving programmes, portfolio changes and the impact of favourable exchange rates. Unit costs decreased by 19% year-on-year from $83/ct to $67/ct.

Mining and Manufacturing 

Rough diamond production decreased by 5% to 27.3-million carats from 28.7-million carats in 2015, which De Beers said reflected the decision it had taken in 2015 to reduce production in response to prevailing trading conditions.