Jewellery demand expected to rise in 2012 but production will reduce.
De Beers enjoyed a buoyant year’s trading in 2011 with a 26% rise in total sales and a 37% uplift in profits before tax, but 2012 will be a more cautious year as the group lays out plans to reduce production levels.
Sales of rough diamonds were up 27% and prices rose 29% in the year. The diamond group produced 31.3 million carats in the 12-month period to December 31.
Earnings at the group grew 21% to US$1.7 billion (£1.07bn) on the back of what the group has called its highest ever sales of US$6.5 billion (£4.11bn).
De Beers described 2011 as “a year of two halves”. The first half was defined by exceptional consumer demand growth coupled with lower than historical levels of global diamond production, resulting in strong polished and rough diamond price growth. However, the second half of the year yielded a slowdown in consumer demand growth due to the challenging macro-economic environment.
De Beers Diamond Jewellers reported good growth in sales across all regions in 2011, with China proving to be particularly strong where it opened stores in Beijing, Tianjin, Dalian and a second shop in Hong Kong during the period. The retail group said that it has plans to expand further in this market in 2012.
Forevermark continued its expansion both in its existing markets of China, Hong Kong and Japan, and launched in India and the US in the second half of the year. Forevermark is now available in 658 retail outlets across nine markets, an increase of 89% on 2010.
While De Beers said that it does not expect an increase in production in 2012, it does expect diamond jewellery sales to grow globally, albeit at lower levels than in 2011. It said that demand will be driven by the overall strength of the luxury goods market, improving sentiment in the US, which is the largest diamond jewellery market for the group, continuing growth in China and the positive impact of the 2011 polished price growth on retail jewellery prices.