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| The new Dominion Diamond Corp. logo. |
Dominion Diamond Corp., the company formerly known as Harry Winston Diamond Corp., said that consolidated sales from continuing operations increased 8 percent to $110.1 million for the fourth quarter. The increase was the result of an improved sales mix, partially offset by a 3 percent decrease in volume of carats sold during the quarter. It also cited increased demand in India, China and the United States.
Meanwhile, operating profit from continuing operations fell 12 percent in the quarter ended Jan 31 to $21 million. Consolidated EBITDA from continuing operations decreased 6 percent to $45.3 million.
Net income from continuing operations fell to $12.1 million, or 14 cents per share, from $12.7 million, or 15 cents per share, a year earlier.
Since 2006, the company operated as two segments: a luxury retail jewelry and watch division under the iconic Harry Winston brand name and a diamond mining business. The company closed its sale of the luxury brand segment to the Swatch Group Ltd. on March 26 in a deal valued at $1 billion. As part of the closing of the transaction, the company changed its name to Dominion Diamond Corp. and its common shares now trade on both the Toronto and New York stock exchanges under the symbol DDC.
The company now operates solely as diamond mining and marketing business and its earnings report reflects this with the results of the luxury brand segment treated as discontinued operations for accounting and reporting purposes.
Other fourth quarter highlights include:
* Rough diamond production during the fourth calendar quarter increased 19 percent to 1.9 million carats.
* The company had 500,000 carats of rough diamond inventory with an estimated current market value of approximately $65 million at January 31, of which approximately $25 million represents rough diamond inventory available for sale, with the remaining $40 million being sorted.
In related news:
* The company previously said it received regulatory approval to complete the $500 million acquisition of the Ekati diamond mine in Canada’s Northwest Territories and diamond sorting and sales facilities in Yellowknife, Canada, and Antwerp and Belgium, from mining company BHP Billiton Canada Inc. Dominion said it expects the transaction to close on or about April 10. It was speculated that the sale of the luxury retail segment was used to finance the acquisition.
* In addition, the company is reportedly interested in buying the remaining stake in Diavik diamond mine. It currently owns a 40 percent share of the mine with the remaining interest owned by mining company Rio Tinto, as Rio has stated a desire to pull out of the diamond business.
* Frédéric de Narp, president and CEO of the Harry Winston luxury segment, has resigned, according to a report in the New York Post. Nayla Hayek, a Swatch board member and daughter of the company’s founder Nicolas Hayek, has assumed de Narp’s role.
“The last year and this first quarter has been a time of great positive change for the company, including changing its very identity,” said Robert Gannicott, Dominion Diamond Corp.’s chairman and CEO. “This change reflects a focus on the production, sorting and sale of diamonds from Northern Canada, a region that we know and understand well. The acquisition of the Ekati Mine, and its operating team, is expected to close next week giving us operational control of both a producing mine and development opportunities in the large scale resources on the Ekati property. Together with our exploration acreage adjacent to the Ekati and Diavik properties, this positions us from grass-roots exploration through development opportunities. We also become the largest supplier of Canadian diamonds sold through an expert sorting and marketing chain that we have perfected through the years of Diavik production.”
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