RAPAPORT... Rockwell Diamonds narrowed its loss in fiscal 2011 as higher rough diamond prices and improved demand helped boost sales. The company posted a net loss of $5.3 million (CAD 5.1 million) for the year that ended on February 28, 2011, compared with the loss of $7.2 million (CAD 7 million) recorded for the previous year.
“Both rough and polished diamond prices improved during the 2010 calendar year with prices enjoying support from strong retail demand for diamonds in the second half of 2010,” Rockwell explained. “In the fourth quarter, prices reached the record 2008 levels.”
The company added that growth in the Indian and Chinese domestic markets has helped boost global demand as those countries gain market share at the retail consumer level.
Rockwell’s revenues increased by 43 percent year on year to $43.7 million (CAD 42.5 million) during the fiscal year with $38.9 million (CAD 37.8 million) generated from tender sales and $4.8 million (CAD 4.7 million) from its beneficiation profit share agreement with Steinmetz Diamond Group. The average price achieved at tender rose 35 percent from the previous year to $1,365 per carat. Production grew 5 percent to 26,165 carats.
The company's cost of sales increased 18 percent to $28.9 million (CAD 28.1 million) and it posted an operating profit of $4.1 million (CAD 4 million), compared with a loss of $3.7 million (CAD 3.6 million) in the previous year.
Rockwell currently operates three alluvial mines – Holpan, Klipdam and Saxendrift - and recently acquired the Tirisano project through its acquisition of Etruscan Diamonds Limited. The company noted, however, that production at all operations has been impacted by high precipitation levels during the first quarter of fiscal 2012, which has forced it to enhance plant efficiency and maximize recovery rates at its operations.
Still, Rockwell stressed that it is confident the positive trend reflected by its financial performance will continue through the year, given operational improvements, reductions in operating costs and the rising price of, and demand for, diamonds.