De Beers reported a 2.75% increase in sales to $2.92 billion during the first half of 2003 and said it had secured $2.5 billion in credit to refinance an existing loan.

De Beers said that, after February, retail sales “lost momentum” as war fears hit the market, and the impact of SARS undermined trade in Asia. However, more recently, “Retail sales have shown signs of recovery in line with growing consumer confidence and global retail sales of diamond jewelry for the first half of 2003 are anticipated to be flat to slightly positive for the first half of last year.”

Even with the earlier troubles, De Beers said demand for uncut diamonds remained strong “largely due to a willingness to hold higher levels of inventory as interest rates continued to decline.”

The company’s headline profits soared 34% to $414 million, of which $248 million will be contributed to accounts of parent company Anglo American, Plc, the world’s second largest diversified miner. Anglo American owns 45% of De Beers. The rest is held by South Africa’s Oppenheimer family and the Botswana government.

De Beers said that if strong demand for diamonds persisted in the second half of the year, results for the full year could then be ahead of the previous year.

In a separate announcement, De Beers said a syndicate of banks had arranged a five-year, multi-currency credit “facility” worth $2.5 billion to refinance an existing $4.55 billion syndicated loan.

JCK