Rough diamond sales at Anglo American's De Beers rise in third cycle
Anglo American said on Tuesday that the value of rough diamond sales at its De Beers unit rose in the third cycle of 2019.
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The value increased to $575m from $496m in the second cycle and $524m in the third cycle of 2018.
De Beers chief executive officer Bruce Cleaver said: "As we move into the second quarter of the year, we saw a continuation of stable demand for our rough diamonds during the third cycle of 2019."
RBC Capital Markets analyst Tyler Broda said: "The first three cycles still have De Beers tracking 10% below on revenue year-over-year. This said, the improvement moves sales levels back to a more normalised position, and with the lower contribution from Venetia during the transition underground, there is a lower volume/revenue threshold to achieve this year to reach guidance. We continue to expect that a tightening of recent surplus conditions should help to boost prices in the second half.
"Anglo American remains our favoured exposure with higher growth than peers, better commodity diversification and more compelling valuation at 4.9x 2019E EV/EBITDA versus sector at 6.3x."