De Beers ended its banner year in 1999 with a whopping 83% increase in profits, to $686 million — up from $374 million in 1998.
De Beers’ diamond stockpile, or its inventory, decreased 18% to $3.957 million, compared with $4.8 million last year. This means that, in the past year, De Beers has already reduced its stocks by one-fifth. The company’s long-term goal is a one-half reduction.
De Beers noted the retail market achieved the highest growth of the decade, reflecting both the improved economy and the success of De Beers Millennium marketing. Globally, retail sales increased by about 11%. The U.S. climbed 12%, Europe 10%, Asia Pacific 13%, and India 21%. The only market that didn’t show an increase was Japan.
The combined diamond account, which tallies the income from the mining sector, showed a 78% increase. De Beers also notes that its export difficulties with the government of South Africa in the first half of the year has been settled and that exports have resumed.
De Beers noted, barring any significant downturn in the economy — particularly in the US — that they expect to sell as many diamonds this year as they did the year before. This is an unusual step for De Beers, which has never before announced a sales projection for the year. It’s a dramatic step, although some analysts are now saying that, given the health of the world economy, they think De Beers’ projection is too conservative!