De Beers Foresees Pleasingly Normal 2017

(Rapaport) - De Beers offered few surprises in its 2016 earnings, which were published on Tuesday and reflected what chief executive officer Bruce Cleaver called a “very pleasing year.” Granted, growth was compared to the weak performance of 2015, as last year saw inventories across the rough and polished sectors returning to “normalized” levels. But De Beers revenue and earnings are closer to the robust levels they enjoyed in 2013. Apart from its improved performance, the company reached a number of significant milestones during the year. It changed CEOs, launched the Gahcho Kué mine in Canada, raised its marketing budget to $120 million, expanded Forevermark beyond 2,000 retail locations, and forayed into generic diamond grading through its IIDGR division. The company is also testing new businesses such as a polished trading platform run by its auction unit, and a consumer buyback program. In short, De Beers is now spread across the distribution chain as it seeks to support its core rough-diamond operations. This year, as it continues to develop each of those auxiliary businesses, the company is focused on driving production – with planned output of 31 million to 33 million carats, compared to 27 million last year – while advancing its marketing programs. Rapaport News spoke with De Beers head of strategy Gareth Mostyn about the company’s plans and some of the challenges facing the market.