De Beers dips despite rise in sales
Wednesday 18 August 1993
The company blamed the fall - from dollars 379m to dollars 373m - on two factors. Its 50 per cent-owned Botswana affiliate had not reduced production following a cut in its sales to the Central Selling Organisation - the marketing cartel owned by De Beers - and had to bear the cost of stockpiling stones on the surface. In addition De Beers' South African and Namibian mines, which have reduced production by 25 per cent in the past year, have had to bear the redundancy costs of reducing the workforce by a similar amount, or about 5,000 workers.
Analysts are sceptical that these factors are sufficient to account for the poor diamond account figures. 'I can't understand how the profit margin has been eroded by so much on record sales of dollars 2.5bn,' Steve Oke of Smith New Court said.
Another analyst suggested that the high level of first-half sales, which reduced stocks from dollars 3.8bn to dollars 3.2bn, was in part caused by De Beers' trading companies buying from the CSO. A spokesman described this as 'absolute nonsense', adding that the surge was caused by a hiatus in supplies from outside. Second-half sales are expected to be lower, because these factors have largely disappeared and because US demand is likely to be weaker.
Despite this, lower costs helped De Beers' attributable earnings rise by 9 per cent to dollars 353m. Apart from reduced wage bills, De Beers has almost halved prospecting costs to dollars 37m, and the balance sheet has been strengthened by the reduction in stocks. The dividend has been maintained at 25.2 cents.
- 2 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 4 How the language you speak changes your view of the world
General Election 2015: Fishing is on Nigel Farage's mind as he casts a line to the disaffected of Grimsby
The man who filmed the Freddie Gray video has been arrested at gunpoint
Indonesia executions: Death row British grandmother Lindsay Sandiford will refuse to wear a blindfold when she faces firing squad
Oxygen-starved 'dead zones' with no marine life up to 100-miles long discovered in the Atlantic Ocean
Russian warships accused of 'chasing away' Swedish vessel to prevent Baltic States from achieving energy independence
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: SNP and its activists 'openly racist' towards the English, Farage says
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...
£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...
£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...
£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...