Dominion Diamond swings from loss to Q3 profit of $25.5M on higher sales revenue

TORONTO – Dominion Diamond Corp. (TSX: DDC) has swung from a year-earlier loss to a profit of US$25.5 million in the third quarter as a big increase in rough diamond sales sharply boosted revenue.

Dominion, which last year sold its Harry Winston luxury retail business, said the profit attributable to shareholders in the three months ended Oct. 30 amounted to 30 cents per share and compared with a loss of US$4.8 million or six cents per share in the comparable 2013 period.

Sales rose to US$222.3 million from US$148.1 million.

“The 50 per cent increase in consolidated sales versus the comparable quarter of the prior year resulted primarily from the decision in the third quarter of the prior year to hold back some inventory due to a weakening of the rough diamond market resulting from macroeconomic uncertainty in India and to the change in the company’s sales schedule resulting from a change in its rough diamond sales platform,” Dominion said in its earnings release Thursday.

“While we continue to focus on the strategic development of our future resources, we are also taking a very disciplined approach to executing on our current mine plan,” added Brendan Bell, the company’s acting chief executive. “This disciplined approach is apparent in these strong results.”

Meanwhile, Dominion said it plans to initiate a dividend following the release of its year-end results in April, with details of the payout to be determined at that time.

“This decision by the board is based on our confidence that we can both fund our expansion plans for the business as well as sustain regular distributions to our shareholders,” said acting chairman Dan Jarvis

Dominion Diamond has ownership interests in two major producing diamond mines in the Northwest Territories — an 88.9 per cent interest in the Ekati mine, along with 65.3 per cent ownership in the surrounding areas containing additional resources, and a 40 per cent interest the Diavik diamond mine.

It supplies rough diamonds to the global market through its sorting and selling operations in Canada, Belgium and India, and is the world’s third-largest producer of rough diamonds by value.