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Dominion Diamond's 4Q Sales +8%, Profit -10%
Closes Ekati Purchase
Apr 4, 2013 5:21 AM
By Avi Krawitz
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RAPAPORT... Dominion Diamond Corporation, formerly known as Harry Winston Diamond Corporation, reported that sales from its mining operations rose 8 percent year on year to $110.1 million in the fourth quarter that ended on January 31, 2013. The company's profit dropped 10 percent to $14.8 million, or 18 cents per share, as operating profit from the mining division fell 5 percent to $12 million and retail profit declined 28 percent to $2.8 million.
The company noted that diamond sales improved due to an 11 percent increase in rough diamond prices and an improved sales mix, even though this was partially offset by a 3 percent decrease in the volume of goods sold out of the Diavik mine.
A tight global rough diamond supply that was impacted by delivery problems at certain mines, coupled with lower Russian supplies and combined with improved polished demand influenced an increase in rough prices during the quarter, according to the company. Dominion Diamond added that the retail jewelry market improved in most areas during the quarter, led by Diwali and the wedding season in India, followed by a positive U.S. holiday season and improved consumer demand in China ahead of the Chinese New Year.
The company owns a 40 percent share in the Diavik mine where production rose 19 percent to 1.9 million carats in the fourth quarter of 2012. Just this week, Dominion Diamond closed the acquisition of the Ekati mine in Canada from BHP Billiton for $500 million.
The company reported that it held 500,000 carats of rough diamonds in inventory, estimated at $65 million as of January 31, of which approximately $25 million worth of goods were available for sale and the remaining $40 million are currently being sorted.
For the full fiscal year, sales from continuing mining operations rose 19 percent to $345.4 million. The increase resulted from a 49 percent rise in the volume of carats sold during the year, offset by a 20 percent decrease in achieved rough diamond prices.
Dominion Diamond reported that profit rose 38 percent to $35.2 million during the year. Operating profit from the mining division rose 32 percent to $22.8 million, while retail division operating profit jumped 58 percent to $12.4 million as sales increased 6 percent to $435.8 million.
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Tags:
Avi Krawitz, diamonds, Diavik, Dominion, ekati, Harry Winston, Rapaport, Swatch
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