As foreseen at the time of the release of the interim results, De Beers Consolidated Mines Limited (De Beers) and De Beers Centenary AG (Centenary) announced in March reduced combined attributable earnings (excluding the share of retained profits of associates) for the year ended December 31, 1992 of US$491 million or $1.29 per De Beers/Centenary linked unit (Comprising one De Beers linked deferred share and one Centenary depositary receipt). This represents a decrease of 35 percent over the combined earrings of $759 million or $2 per linked unit for the previous year. Including the share of retained earrings of associates, combined earring were $757 million or $1.99 per De Beers/Centenary lined unit (1991” $1.068 billion 0r $2.81 per linked unit.)

          Combined dividends for the year declined by 29 percent to 79.1 US cents (112.1 US cents) per De Beers/Centenary linked unit. To South African unit holders who own by far the greatest portion of the units, these dividends converted at the exchange rate prevailing at December 31, 1992, amounted to 241.6SA cents (1991: 307.5 SA cents), a decrease of 21 percent. The actual amount which unit holders will receive depends on rates prevailing at the fixing date of March 29, 1993 for the final dividends scheduled for payment on May 26, 1993.

            Included in the above and as contemplated in August 1992, a final dividend was declared by De Beers of 34 SA cents (1991: 59 SA cents) per linked deferred share making a total of 62 SA cents for the year (1991: 87 SA cents) while Centenary Holding, the wholly owned Luxembourg subsidiary of Centenary, has declared a preference dividend and a final dividend equivalent to 12 and 27 US cents respectively per Centenary depositary receipt (1991: 12 and 46 US cents). In addition, the Directors have recommended that the shareholders of De Beers Centenary AG declare at the forthcoming Annual General Meeting a dividend of 7 Swiss Francs per share (1991: 10 Swiss Francs) equivalent to 4.8 US cents per Centenary depositary receipt (1991: 7.4 US cents). This would bring the total dividends declared by the De Beers Centenary AG group for the year to 58.8 US cent (80.4 US cents) per depositary receipt.

            The directors comment that: “Consumer attitudes to diamond jewelry remain positive. While final figures for world retail sales of diamond jewelry for 1992 are not yet available, it looks as though such sales will have matched those of the previous two years with improved sales in the United States between Thanksgiving and Christmas. However, European markets are sluggish and in Japan falling imports and retail diamond sales give reason for concern. Retail markets in the rest of East Asia continue to expand.

            “The CSO restricted its sales in the latter part of 1992 and the balance between rough supply and demand in the cutting centers has been restored. The mood in those centers is now cautiously optimistic.

            “The February price increase of an average of 1.5 percent has been readily absorbed by the market. Indeed, sales at the first two sites have been very good, though they have been stimulated by a number of exceptional factors, including the current scarcity of diamonds coming out of Angola owing to the rainy season and the civil war, a hiatus in the supply of Russian polished owing to the imposition of 1 20 per cent export duty (now being lifted); and unusual demand from India flowing partly from the rupee becoming fully convertible and partly from increased off take from the United States.”

            In line with current accounting a practice combined results have been converted at average commercial exchange rates during the year, 1991 figures previously converted at year-end rates have been restated. The combination of lower CSO sales for 1992, continued inflation, static diamond prices, the abnormal increase of illicit diamonds from Angola during the year and the imposition of quotas by the CSO from September 1992 resulted in the combined diamond account decreasing by 20 per cent to $644 million ($801 million). The diamond account of Centenary reflects a decrease of 18 per cent over the previous year. De Beers was similarly affected with a 31 per cent lower diamond account of R205 million (1991: R279 million) despite a more favorable Rand/Dollar exchange rate.

            Combined income from investments outside the diamond industry was marginally higher at $211 million ($208 million) and interest income was $103 million ($207 million), reflecting lower cash balances.

            Combined prospecting and research expenditure amounted to $132 million ($115 million) and interest paid was higher at $73 million ($66 million) reflecting higher borrowings.

            Taxation absorbed an amount of $224 million (1991: $252 million) leaving a combined profit after tax of $504 million ($775 million). After deducting the profit attributable to outside shareholders in subsidiaries and preference dividends, the combined net profit attributable to unit holders amounted to $491 million ($759 million).

            The combined share of retained profits of associates was $266 million ($309 million) while the combined share of extraordinary losses of associated companies amounted to $3 million (1991: $105 million).

            Combined diamond stocks increased by $731 million to $3.765 billion ($3.034 billion) and net current assets were $179 million ($557 million). The value of total combined investments and loans comprising trade investments and investments outside the diamond industry at market/directors’ valuation amounted to $5.418 billion/R26.819 billion ($8.385 billion/R26.876 billion).

            The trade advance of $400 million, plus the current portion of $200 million which is included in debtors (in the Combined and Centenary balance sheets), represent the amounts outstanding of the original advance of $1 trillion to the Russian diamond industry. Repayments totaling $400 million had taken place by December 31, 1992 and a further amount of $50 million has been repaid since. The advance is fully secured by collateral of diamond held in London.

            Long and medium term loans totaled $1,490 billion (1991: $1.241 billion). Total facilities are more than twice such drawing.

            The table below sets out the division of earnings and assets between the two elements of the linked unit: