Namdeb sees increased diamond sales

NAMIBIA’S top diamond producer, Namdeb, yesterday released its interim results for the six-month period to June 2005 with carats produced nearly the same as that recorded for the first half of last year, although sales increased due to a significant rise in diamond prices.

The company produced 951 000 carats, of which 888 000 were sold at a total value of N$2 billion. For the same period in 2004, 959 000 carats were produced and 810 000 were sold, generating sales of N$1,7 billion.Due to the increased sales, the distributable amount to shareholders – the Government of Namibia and De Beers – increased by six per cent.Distributable amount for the six months ending June 2005 was at N$559 million compared to N$527 million of the previous corresponding period.However, Namdeb Group Financial Manager Andrew Schanknecht expected reduced profits for the rest of the year.”It is expected that carats sold in the second half of 2005 will be equivalent to the achievement of the first half.However, it must be noted that the average stone size of the diamonds planned for production in the second half is lower than the first half of 2005 and hence the average price carat will also be less for the latter half of the year,” he said.Schanknecht said this was due to the expected increase in the proportion of smaller gems from the Elizabeth Bay Mine.The result of a revenue forecast by Namdeb shows that the full-year distributable amount for this year is expected to be lower than that achieved in 2004 which was at N$1 billion.Although regional trends for diamond jewellery sales in the first six months were mixed, Schanknecht said the overall growth had continued to remain positive, following the trend of strong growth seen in 2004.With synthetic diamonds emerging as a force to reckon with and competing with natural diamonds, De Beers is currently implementing and running different programmes, including a consumer-confidence programme, to boost its diamond business.De Beers’ Manager for external affairs, Daniel Kali, said the company did not view synthetic diamonds as a threat but rather as a challenge.For the same period in 2004, 959 000 carats were produced and 810 000 were sold, generating sales of N$1,7 billion.Due to the increased sales, the distributable amount to shareholders – the Government of Namibia and De Beers – increased by six per cent.Distributable amount for the six months ending June 2005 was at N$559 million compared to N$527 million of the previous corresponding period.However, Namdeb Group Financial Manager Andrew Schanknecht expected reduced profits for the rest of the year.”It is expected that carats sold in the second half of 2005 will be equivalent to the achievement of the first half.However, it must be noted that the average stone size of the diamonds planned for production in the second half is lower than the first half of 2005 and hence the average price carat will also be less for the latter half of the year,” he said.Schanknecht said this was due to the expected increase in the proportion of smaller gems from the Elizabeth Bay Mine.The result of a revenue forecast by Namdeb shows that the full-year distributable amount for this year is expected to be lower than that achieved in 2004 which was at N$1 billion.Although regional trends for diamond jewellery sales in the first six months were mixed, Schanknecht said the overall growth had continued to remain positive, following the trend of strong growth seen in 2004. With synthetic diamonds emerging as a force to reckon with and competing with natural diamonds, De Beers is currently implementing and running different programmes, including a consumer-confidence programme, to boost its diamond business.De Beers’ Manager for external affairs, Daniel Kali, said the company did not view synthetic diamonds as a threat but rather as a challenge.