Harry Winston Ends Q1 with a Loss, Rough Sales Fall 29%

Harry Winston Diamond Corporation ended the first quarter with a consolidated net loss of $45.1 million, beating analyst forecasts. The company said the loss included a non-cash dilution loss of $34.2 million stemming from the Kinross investment in Harry Winston Diamond Limited Partnership, which holds the company's 40 percent interest in the Diavik diamond mine.

The loss also includes a $5.8 million foreign exchange loss, compared to a $0.2 million net foreign exchange gain in the comparable quarter of the prior year, when the company posted $21.3 million net earnings.

Rough diamond sales totaled $57.7 million, a 29 percent year-over-year decrease. Rough diamond production was 0.7 million carats, consistent with production in the prior year. As a result of lower sales, the mining segment recorded a $5.1 million loss compared to $42 million in earnings in the first quarter of 2008.

The retail segment recorded a 30 percent decrease in sales to $51.9 million, with a loss from operations of $5.0 million compared to a loss from operations of $2.4 million in the first quarter of the prior year. Retail segment selling, general and administrative expenses decreased by $5.8 million from $36.1 million in the comparable quarter of the prior year.