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Market NewsCommentDe Beers full year 2007 sales dip

De Beers full year 2007 sales dip

De Beers announced a 3% drop in rough diamond sales to $6.8 billion for the full year of 2007, as a result of supply constraints to the Diamond Trading Company (DTC), the company said. Underlying earnings rose 14% to $483 million for the full year ending December 31, 2007, from $425 million the previous year. Production totalled 51.1 million carats during 2007, more or less unchanged from last year. De Beers announced it had made an impairment against the value of the Group’s Canadian assets of $965 million (US$), due to the strengthening of the Canadian dollar which has driven up the cost of fuel, labour and capital expenses. It invested $1.12 billion in expansion capital during 2007, mainly for construction at Snap Lake and Victor in Canada, and for the Voorspoed mine and SASA offshore mining vessel in South Africa. For this year, De Beers said it aims to maintain production capacity at 2007 levels with new production of over 1.5 million carats from the Group’s Canadian mines offsetting the impact of the sale of the Group’s operations at Cullinan and Kimberley in South Africa. But it warned energy issues in southern Africa could present operational challenges, adding contingency plans were being put in place. De Beers Jewellers, its retail venture with LVMH, posted a 44% increase in sales. The high-end retailer, which has 23 stores worldwide, expects to see further expansion including among others, new stores in the US, Hong Kong, Russia, the Middle East and a flagship in Tokyo.

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