Aber Q1 Rough Diamond Sales $42.2 Million, Harry Winston Sales Strong

Aber, the Canadian diamond miner and now high-end retailer, too, reports sales of $52.3 million, $10.1 million of which are sales by Harry Winston. This is the first quarter the company’s results are incorporating Harry Winston’s.

Aber’s net earnings for the quarter totaled $2.8 million compared to net earnings of $5.2 million in the first quarter last year, before the Diavik Mine reached commercial production. First quarter earnings decreased $0.4 million compared to the fourth quarter results of $3.2 million.

The company explains the decrease in earnings as resulting primarily from income tax expenses that quadrupled during the quarter compared to the preceding year reflecting an increase of 2% in future income tax rates in the Northwest Territories.

Prior to the commencement of commercial production in August 2003 at the Diavik Mine, all interest costs were recorded as deferred mineral property costs.

Pre-tax earnings for the quarter ending April 30 were $11.7 million as compared to $4.6 million for the fourth quarter and $7.5 million for the first quarter of the previous year.

The pre-tax earnings were offset by an income tax expense of $8.9 million, which included a cumulative, non-cash future tax expense of $3.3 million, relating to an increase in the Northwest Territories corporate tax rate from 12% to 14%.

Aber’s 40 percent share of the Diavik diamond mined totaled 615,000 carats in the January – March period.

Harry Winston

Aber’s retail sales, generated by retailer Harry Winston, totaled $10.12 million during the quarter resulting in earnings of $328,000.

Reported increase in sales was due to the resurgence of the US market and increased tourist traffic, while sales in Europe and Japan were broadly in line with the previous year.

The wholesale watch business continued growing, with the US market “leading the charge,” the company says, with orders significantly higher for Harry Winston limited watches at the Basel Watch and Jewelry fair.

The company completed the acquisition of a 51% interest in Harry Winston in April. Aber has an option to purchase the remaining 49% interest of Harry Winston on April 2010. Tom O’Neill has been appointed CEO of Harry Winston and President of Aber with Robert Gannicott continuing as Aber’s CEO.