Harry Winston Q3 Rough Sales $21 Million, Retail $54 Million

Harry Winston Diamond Corporation recovered from the deep loss it posted in the second quarter, seeing the loss shrink to $0.2 million in the third quarter ended October 31. Consolidated sales in the quarter were $74.8 million, of this, just $20.8 million were generated by rough diamond sales - a 77 percent decrease from $90.7 million in the comparable quarter of the prior year.

The low income from rough diamond sales is due to a 9 percent decrease in rough diamond prices and the temporary closure of the Diavik diamond mine, which led to a 66 percent drop in production to 0.3 million carats.

The volume of sales dropped 75 percent and therefore the company had a single diamond sale in the third quarter.

After cost of sales and administrative expenses, the group had a $4.94 million loss from operations, compared to earnings of $47 million in the comparable quarter of the prior year.

The retail segment recorded a 7 percent decrease in sales to $54 million compared to the third quarter of the prior year. However, the loss from operations decreased significantly to $0.5 million from a loss of $4 million as retail gross margins for the quarter improved to 53.9 percent compared to 46.4 percent in the comparable quarter of the prior year.

"We are very pleased to see a solid reversal in the negative trends that have characterized the previous quarters,” said Chairman and CEO Robert Gannicott.

“Diavik production is set to increase, rough diamond prices continue to rise, and retail sales have seen substantial improvement, led by the Far East, including Japan. If US recovery takes hold it will inevitably produce incremental demand for diamond products".