Profits at diamond firm De Beers have been crushed after demand for luxury products was hit by the recession.
Profits at diamond firm De Beers have been crushed after demand for luxury products was hit by the recession.
The world’s largest diamond producer reported a 99% drop in net profits for the first half of 2009 this morning, to just $3m (£1.82m). It made $316m in the same period a year ago, before the economic downturn deterred even the wealthy from splashing out on non-essentials.
De Beers blamed an “extraordinarily difficult” trading environment for the slump in profitability. Sales of rough diamonds were down by 57% to $1.4bn, with production slashed by 73% to 6.6m carats.
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The industry has been severely impacted by the global economic environment being the most difficult in decades,” said the company, which has cut its global workforce by 23% and temporarily halted production at mines in Africa and Canada.
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