Debmarine Namibia has reported a 38% decline in revenue to N$8.5 billion for 2024, attributing the drop to reduced diamond prices and lower production levels.
The country produced 2.234 million carats of rough diamonds, marking a 4% decrease from the 2.327 million carats mined in 2023.
Debmarine Namibia Chief Executive Officer Willy Mertens acknowledged the subdued financial performance over the past two years but assured stakeholders of the company’s financial resilience.
“Earnings before interest, tax, depreciation, and amortisation (EBITDA) reduced by 86% to just under a billion Namibia Dollars, in fact at N$951 million. Let’s look at the movement in EBITDA from N$6.76 billion in 2022, price or market taking out N$2.3 billion in 2023 and another N$4.8 billion in 2024—that is a massive N$7.1 billion over the past two years,” Mertens said.
He attributed the decline to lower diamond prices and production adjustments made in response to market conditions, leading to a 91% drop in free cash flow. Despite a 13% reduction in total assets, Debmarine Namibia maintains a strong asset base valued at N$13 billion, with equity standing at approximately N$4 billion.
To enhance efficiency and recovery rates, the company has invested in two new crawlers for the Benguela Gem vessel. The upgrades are expected to improve recovery speeds by 20% and enable access to different geological deposits.
The downturn comes amid a 3.5% decline in global demand for natural diamond jewelry in 2024, exacerbated by increasing polished stock levels in the midstream sector. Polished stock levels surged to US$2 billion in July 2024 before reducing to US$1.2 billion due to a constrained supply of rough diamonds.
Executive Director of Mines and Energy, Penda Ithindi, highlighted the potential impact of G7 sanctions on Russia and Iran, particularly regarding revenue flows and the technological infrastructure required for verification processes.
“In light of these challenges, it is crucial to take proactive and strategic measures to stabilize the diamond industry. This response must go beyond cost-cutting and should focus on securing the industry’s future and protecting the livelihoods that depend on it,” Ithindi stated.
He acknowledged the difficult decisions being made amid the industry downturn, including potential job losses. However, he emphasized the need for a human-centered approach in all strategies aimed at mitigating the impact.
“The government remains committed to supporting the industry through collaborative measures to navigate the downturn. The conversation has started, and we will continue working closely with stakeholders, including mining companies, employees, and impacted communities, to develop sustainable solutions,” he added.
