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Lucara's 4Q Revenue +20%, Posts $17M Loss
Feb 22, 2015 6:49 AM
By Ronen Shnidman
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RAPAPORT... Lucara Diamond Corp. reported that revenue rose 20 percent year on year to $70.5 million in the fourth quarter of 2014, even as the rough market softened during the period. Diamond sales grew due to higher prices and despite a 6 percent drop in the volume of diamonds that were sold, at 104,405 carats.
The company stated that the average value of its rough diamonds sold during the quarter increased 56 percent to $675 per carat. All of Lucara’s diamonds came from the Karowe mine in Botswana, which is the company's sole producing mine.
Company management noted that price growth was driven by higher market prices compared with the same quarter in 2013, while Lucara also sold a greater volume of diamonds larger than 10.8 carats.
Lucara declared a net loss of $16.8 million during the quarter compared with a profit of $21.3 million a year earlier. The loss was due entirely to an impairment and restoration charge that it took following a decision to divest from the Mothae mining project in Lesotho during the quarter.
For the full year 2014, Lucara’s revenue grew 47 percent to $265.5 million, while profit fell 30 percent to $45.7 million. Income was impacted by the impairment charge and higher taxes paid during the year.
The average price achieved for diamonds sold during the year increased 57 percent to $644 per carat. Of these, the average price of Lucara's regular production grew 28 percent to $318 per carat, while its exceptional stones above 10.8 carats rose 34 percent to $32,471 per carat. The volume of these larger stones recovered at Karowe increased 11 percent to 815 stones in 2014.
Lucara's production fell 2 percent to 430,000 carats, although this slightly exceeded its previously stated guidance of 420,000 carats expected for the year.
William Lamb, Lucara’s CEO, noted that rough prices appeared to firm at the company’s January tender after softening toward the end of 2014. However, the company expects production to remain flat, or decline slightly this year, reaching between 400,000 carats and 420,000 carats. In its guidance for the year, Lucara projected that its revenue will reach between $230 million and $240 million, which would represent a decline of at least 10 percent from 2014.
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Tags:
Botswana, Karowe, lucara, Ronen Shnidman, Rough diamond prices, rough prices, William Lamb
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