In the first half of 2020, De Beers suffered many heavy losses due to the impact of the Covid-19 epidemic. And many significant challenges will remain for the diamond jewelry market.

The diamond miner was in the red for the six months ended June 30, with an underlying loss of $214 million compared with a profit of $187 million a year earlier. Earnings before interest, taxes and depreciation came in at just $2 million, compared with $518 million in the first half of 2019.

Difficulties for rough diamond demand will continue in the short term with ongoing restrictions in southern Africa, as well as the risk of more Covid-19 cases in cutting centers. India company's interim interpretation report by parent company Anglo American published on Thursday.

Photo: A De Beers trade goods box with rough diamonds. (De Beers).

At its headquarters in Gaborone, Botswana De Beers has organized 10 points of sale. However, travel restrictions forced them to cancel the third trading session, which began at the end of March, and allow refunded customers to distribute all their goods at subsequent events. . The company's rough diamond table sales fell 56% year-on-year to just $1 billion during the period, and most of that revenue came from the first two sales points of the year, before the pandemic. The average price fell 21% to $119 per carat, while the company's average rough price index fell 8%.

Total revenue fell 54% to $1.22 billion, including revenue from the De Beers rough diamond unit, the Element Six synthetic and industrial diamond segment and other divisions such as grading and research.

De Beers said it has been accelerating its business transformation due to the slowdown in demand, including reviewing its mining operations and rough diamond sales platform. The company sells about 90% of its rough diamonds through long-term contracts to customers and the rest through auction platforms. A review of contracts was already underway before the coronavirus crisis, with De Beers planning a more flexible supply model by dividing customers into three categories: manufacturers, dealers and suppliers. retail.

CEO Bruce Cleaver informed employees on Thursday about the plans, according to a report on Miningmx. The company maintained its full-year outlook for 25 million to 27 million carats in 2020. Production fell 27% to 11.3 million carats in the first half.

The company's jewelry brands also saw steep declines as the majority of De Beers Jewelers stores and its Forevermark-branded retail partners were closed for much of the period. fox. While most have reopened, the risk of shutdowns remains possible, De Beers noted.

The current market outlook is highly uncertain due to the possibility of a second wave of Covid-19 infections [and] the possibility of fiscal and monetary measures to continue to support employment and business in consuming countries. usage, as well as the shape and strength of the global macroeconomic recovery, the company said.

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