Namdeb H1 Sales Soften On Price Decrease

Namdeb rough diamond sales in the first half of the year have decreased despite an increase in production. Revenues from rough sales were N$2.3 billion ($311.44 million), 9 percent lower compared to the first six months of 2006.

The mining firm, a 50/50 joint venture with the government of Namibia, said the decrease was due mainly to “the effect of the price correction in the rough diamond market in the second half of 2006.”

In the first half of 2007, 1.178 million carats were produced, rising from 1.006 million carats mined in the same period of 2006. Average stone size remained 0.45 carats. 1.086 million carats were sold, for an estimated average of N$2143.65 per carat ($290.27).

Pre-tax profit increased to N$555 million ($75.15 million), rising 17 percent over last year, a result of a decrease in prospecting costs and other operating expenses.

Taxation for the period amounts to N$406 million ($54.98 million), which represents 73 percent of pre-tax profits.

Prospecting and research and development charges also decreased, as the miner did not operate their marine dredging project this year.

Finally, other operating expenses decreased due to arrangements of the new sales agreement coming into effect in 2007, Namdeb said, which led to the establishment of Namibia Diamond Trading Company (NDTC).

“General performance of the first half of 2007 shows an increase in net profit compared to the same period last year,” the company said in a release.  “This was achieved by increased production during the first half of 2007. It is anticipated that this performance will not be repeated in the second half of 2007, resulting in the forecast net profit for the full year being lower than achieved for the full year in 2006.”

Namdeb added that the main reasons for this are the timing of the marine vessels’ in–port periods, the effect of the recent fire at No. 3-Plant and the timing of major projects like new mini-mines and Pocket Beaches phase 2.