De Beers, the world’s biggest diamond company, said first-half profit jumped 26% as rising jewelry demand allowed it to charge more for the rough gems it sells to cutters, Bloomberg News reports.
Net income rose to $341 million in the period from $270 million a year earlier, the Johannesburg-based company said. Diamond sales rose 2.2%, to $2.98 billion, propelled by a 14% rise in prices.
De Beers sells three of every five rough diamonds sold in the world, Bloomberg News reports. Since 2000, the company has sought to spur demand in the $56.5 billion retail market by encouraging its clients to spend more on marketing. De Beers also stopped buying gems from competitors to bolster prices, eliminating a stockpile that was valued at $4.9 billion in 1999.
De Beers pleaded guilty last week to fixing prices of industrial diamonds in the United States and was fined $10 million, ending a decade-old legal battle. The plea may allow the company to operate freely in the United States, where half of all diamond jewelry is sold.
Profit before one-time items and goodwill amortization rose 13% in the latest period, to $424 million, Bloomberg reports. Anglo American’s share of De Beers’s earnings on that basis was $217 million. Anglo American, the world’s second-largest mining company, owns 45% of De Beers, and the stake was its biggest source of profit in 2003.