![De Beers H1 Revenue Plummets 21% to $2.2 Billion](http://media.assettype.com/diamondworld%2F2024-07%2F8e976f21-d7ae-48f6-b495-8c73786bdf52%2FAlrosa-polished-diamonds-credit-Alrosa-1280.jpg?w=480&auto=format%2Ccompress&fit=max)
De Beers, a leading name in the diamond mining industry, has unveiled its financial results for the first half of 2024, revealing a significant 21% drop in revenue to $2.2 billion. This decline highlights the ongoing challenges faced by the company due to weakened demand and heightened competition from lab-grown diamonds. Despite a stable average price per carat, reduced sales volumes and increased operational costs have impacted the company’s profitability.
Financial Highlights:
- Total Revenue: De Beers reported a 21% decline in total revenue, dropping to $2.2 billion compared to $2.8 billion in the same period last year.
- Rough Diamond Sales: Sales of rough diamonds fell 20%, down to $2.0 billion from $2.5 billion previously.
- Sales Volume: The volume of rough diamond sales decreased by 22% to 11.9 million carats.
- Average Realised Price: The average realised price remained relatively stable at $164 per carat.
- EBITDA: Underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) declined 14% to $300 million from $347 million in the prior year. De Beers cited reduced sales volumes and higher unit costs as the primary factors behind the EBITDA decrease.
Strategic Initiatives:
Despite the challenging market conditions, De Beers highlighted several strategic initiatives undertaken during the period:
- Origins Strategy: The company announced its new "Origins" strategy aimed at streamlining operations and reducing costs by $100 million annually.
- Marketing Collaborations: De Beers formed new marketing collaborations with leading diamond jewellery retailers, including Signet in the US and Chow Tai Fook in China, to boost natural diamond demand.
- DiamondProof Device: The diamond giant introduced DiamondProof, a device designed to distinguish between natural and lab-grown diamonds, addressing the growing competition from synthetic diamonds.
Looking ahead, De Beers anticipates a gradual recovery in demand as midstream inventories decline and consumer confidence improves. However, the company acknowledges the ongoing challenges posed by lab-grown diamonds and the need for continued focus on marketing and product differentiation.
In summary, while De Beers faces a tough market environment, its strategic initiatives and innovations are aimed at stabilizing its position and fostering long-term growth in the natural diamond market.