De Beers says 2006 Sales Down, Earnings Up

De Beers said Tuesday that sales by its Diamond Trading Company unit were down at $6.15 billion, while net earnings rose 32 percent to $730 million thanks to certain asset sales.

De Beers said the drop in sales from a record $6.5 billion in 2005 reflected reduced Russian supply available to the DTC, and the continued challenging environment in the wholesale market for rough diamonds. However, it added that “solid consumer demand for diamond jewelry continued in 2006, with China and India reporting strong sales growth, and the U.S. growing in line with GDP.” 

In 2006 De Beers achieved record production levels for De Beers of 51 million carats.

De Beers said earnings before interest, tax, depreciation and amortization (EBITDA) fell 12 percent to $1.2 billion in 2006 as a result of the lower DTC sales and increased exploration and development costs.

Net earnings were helped by the sale of 26 percent of the equity of De Beers Consolidated Mines to a group run by black investors and the sale of the group’s interest in a Canadian joint venture.