De Beers’ first-half diamond sales recovered to 2019 levels as the recovery in consumer demand resulted in robust midstream rough demand.
The company’s total revenue in the six months to 30th June more than doubled (+142%) to $2.9 billion compared with 1.2 billion a year ago. Of this, rough diamond sales rose to $2.6 billion from $1.0 billion last year. In volume terms, rough diamond sales grew 126% year-on-year to 19.2 million carats, while the average realised price rose by 13% to $135/ct.
“The closing price index was 14% above the opening index over the first six months of 2021, reflecting positive consumer demand for diamond jewellery as well as tightness in inventories across the diamond value chain,” De Beers said.
De Beers’ underlying earnings before interest, tax, depreciation and amortisation (EBITDA) increased to $610 million from $2 million last year.
Global consumer demand for diamonds continued to recover from the impact of Covid-19, supported by fiscal stimulus in the US and the roll-out of Covid-19 vaccines. Restrictions on international travel and entertainment over the course of the pandemic resulted in higher discretionary spending on luxury goods, including diamond jewellery, the miner said.
De Beers said that in the first six months of 2021, the cutting centres achieved strong sales of polished diamonds in response to the ongoing recovery of consumer demand. However, the severe Covid-19 wave in India during April and May reduced capacity at cutting and polishing operations within the key Indian midstream sector, which was further exacerbated by polished diamond grading backlogs in key markets. The relative shortage of polished supply contributed to a positive polished price trend in the first half of 2021.
The recovery of demand in all parts of the pipeline enabled rough diamond producers to destock at the start of 2021, the company added. This robust demand, combined with supply constraints arising from production challenges, created a favourable dynamic in the first half of 2021 that also supported higher rough diamond prices.
The first half of 2021 saw a strong recovery in consumer demand for De Beers’ branded diamond jewellery from both De Beers Jewellers and De Beers Forevermark.
Online jewellery sales continued to show strong growth, reflecting the strong e-commerce growth trend over recent years as consumer buying habits continue to evolve into the digital age. De Beers said the strong recovery in consumer demand is expected to continue, as the global economy recovers from the impact of Covid-19. In addition, midstream capacity is expected to increase during the second half of the year, subject to the Covid-19 situation in India.