De Beers' comment on estimated results

2000 was an exceptional year for De Beers and the diamond industry as a whole. The US market, now accounting for nearly 50 per cent of world retail sales, continued to grow, underpinned by the positive economic environment, and boosted by the impact of the De Beers Millennium advertising campaign. All other retail markets, with the exception of Japan, showed positive growth, and the retail sales outlook during the year generally encouraged the trade to restock.

Based on these factors, the DTC was able to achieve record sales of US$ 5,670 million. De Beers' headline earnings increased by 137 per cent to US$1,707 million, and own earnings improved by 84 per cent to US$1,289 million. Diamond stocks were reduced during the year by US$ 924 million, from US$ 3,989 million to US$ 3,065 million. The significant run down on stocks towards working stock levels (including the sale of most of the longer held, higher margin stocks), the positive pricing trends during the year, and the bringing to account of full earnings from Venetia, with effect from 1 January 2000, have all contributed to higher margins on the diamond account and the exceptional performance for the year.

The boards of directors of De Beers Consolidated Mines Limited and De Beers Centenary AG intend to recommend and declare combined final dividends totalling US$ 1.00 per linked unit when they meet towards the end of this month.

Although the US market showed overall positive growth for 2000, the third quarter had already seen a slow down and the Christmas season was disappointingly below expectations. The American trade is therefore currently in an overstocked position. Sales prospects for 2001 will be negatively influenced by the time it takes for this imbalance to be rectified, and will also depend on the general economic outlook for the US and the rest of the world. In these circumstances it is highly unlikely that sales for 2001 will reach the record levels achieved in 2000.

The audited combined Provisional Annual Financial Statements will be released in due course.