South Africa’s De Beers said that diamond sales during 2004 were boosted by Asian demand and a weakening dollar, sending net profits soaring by 25% to $498 million, Agence France Presse reports.
The upbeat figures came as the group reported a 3% increase in sales of rough diamonds for the year ending Dec. 31, from the previous year to 5.695 billion dollars.
Pre-tax profits for 2004 before amortization rose 12% to 652 million dollars, the group reportedly said in a statement.
Global diamond jewelry sales grew by about 6% when valued in South Africa’s rand but increased 8% when valued in dollars, due to the weakening U.S. currency, De Beers reportedly said.
Strong areas of growth were Asia-Pacific, India, and the Gulf region were reported as the strong areas of growth, while Japan also recorded modest growth.
Sales in the United States—which accounts for more than 50% of world diamond jewelry sales—remained solid over the crucial Christmas trading period, the company reportedly said.
De Beers reportedly warned that diamond production during the first half of 2004 was “significantly below target” but that the deficit was more than compensated for during the second half of the year.
The diamond group also reportedly warned that “2005 is likely to be a more challenging year for the diamond industry,” adding: “With the transformation of the industry that has taken place over the last few years, there is now growing evidence that diamonds are competing favorably with other luxury products.”
De Beers, founded in 1888, produces more than 40% of the world’s diamonds in terms of value from mines in South Africa, Botswana, Namibia, and Tanzania.
The Diamond Trading Company, the retail arm, sells around two thirds of the world’s annual supply of rough diamonds.
The 45% stake that Anglo American owns, would contribute 381 million dollars for the year to the mining giant, down from 386 million in 2003, De Beers reportedly said.