Dominion Diamond Corp Swings to Loss in Q2

(IDEX Online News) –Dominion Diamond Corp posted a second-quarter loss of $16.3 million compared with a profit of $4.8 million last year.

The loss for the quarter included $5.4 million in after-tax restructuring costs for the Antwerp office and $10.6 million of expenses related to canceling credit facilities that had been previously arranged in connection with the acquisition of the Ekati diamond mine from BHP Billiton for $500 million.

When stripping out these two issues along with the impact of the sale of opening acquisition inventory, which was included at market value in Ekati's cost of sales, the company's estimated consolidated net profit attributable to shareholders for the quarter would have been $11.1 million.

Consolidated sales from continuing operations were $261.8 million for the quarter compared to $61.5 million for the comparable quarter of the prior year, resulting in an operating profit of $12.4 million compared to an operating profit of $8.9 million in the comparable quarter of the prior year.

The company recorded sales from the Diavik diamond mine of $91.3 million compared to $61.5 million in the comparable quarter of the prior year. It sold approximately 700,000 carats from the Diavik diamond mine for an average price per carat of $130, compared to 400,000 carats for an average price per carat of $142 in the comparable quarter of the prior year.

The 62 percent increase in volume of Diavik diamond mine carats sold versus the comparable quarter of the prior year resulted primarily from the decision in that prior quarter to hold some Diavik diamond mine inventory from all price ranges until stability returned to the rough diamond market.

The 9 percent decrease in the company's achieved average rough diamond prices for the Diavik diamond mine as compared to the second quarter of the prior year resulted primarily from the sale during the second quarter of the prior year of higher priced Diavik diamond mine goods that had originally been held back by the company in the first quarter of fiscal 2013 due to a then observed imbalance in the rough and polished diamond prices for the goods.

During the second quarter, the Ekati diamond mine recorded sales of $170.5 million and sold approximately 600,000 carats for an average price per carat of $289.