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Dominion’s Sales Decline 5% in 1Q

May 26, 2016 9:52 AM   By Rapaport News
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Dominion Diamond Corporation reported a slower pace of decline in quarterly revenue after last year’s slump as rough prices picked up during the first three months of the fiscal year.

Sales fell 5 percent to $178.3 million in the first fiscal quarter that ended April 30, the miner said. Even though the company lowered its prices by 5 percent in its January sale, in line with the market, the prices recovered “quickly”. Prices ended the quarter about 8 percent higher on average than the level at which they started the fiscal year, Dominion said.

That said, prices were still lower compared with last year. Sales by volume more than doubled to 2.6 million carats from almost 1.3 million carats a year ago, implying the average price plummeted to $68.58 per carat versus $149.68 per carat.

Revenue slumped 21 percent in the full fiscal year that ended January 31 and the company swung to a loss. Fourth-quarter sales last year dived 26 percent.

Conditions in the rough market improved “significantly” in the first quarter as diamond manufacturers replenished inventories after a positive retail season at the end of 2015, Dominion explained.

“Consequently the downward pressure on prices faced last year was reversed, which bodes well for more stable market conditions in fiscal 2017,” the miner said.

The company sources its diamonds from two mines in Canada’s Northwest Territories. Sales from the company’s 100-percent owned Ekati mine declined in value terms while revenue from the Diavik mine increased. Sales by volume increased significantly at both sites.

The company plans to hold three rough sales in the second fiscal quarter of 2017.

Separately, Dominion said production at the Ekati mine increased 34 percent in the quarter to 1.1 million carats. The company’s share in output at Diavik – of which it owns 40 percent in a joint venture with Rio Tinto – surged 26 percent to 754,000 carats in the three months to March 31.
Tags: Canada, Diavik, Dominion, Dominion Diamond Corporation, ekati, mining, Production, Rapaport News, Rough Diamonds, Rough markets, Rough Production, rough sales
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