De Beers plans for halving of turnover – FT
LONDON, April 9, 2009 – De Beers is planning for a halving of its turnover this year due to the sharp fall in diamond prices, the Financial Times reported, quoting a senior company official.
The South African group, which mines 40 percent of the world’s diamonds, told the FT it is convinced it can survive two more years of recession.
“Trading conditions are tough,” said Stuart Brown, De Beers’ finance director.
“But because we saw it early and took very dramatic steps around the business, we are in a position to weather trade in 2009 and 2010 without any recourse to shareholder funds.”
In response to weak demand and sliding diamond prices, De Beers has cut production at its mines by 40 percent year-on-year.
“Our plan for 2009 sees us remaining profitable, cash neutral and meeting covenants on our loans, even if overall turnover drops by 50 percent,” Brown said.