TORONTO, April 5, 2012 /PRNewswire/ --
Harry Winston Diamond Corporation (TSX: HW) (NYSE: HWD) (the "Company") today announced its fourth quarter and year-end results for the period ending January 31, 2012.
Annual Results Highlights:
- Consolidated sales increased 13% to $702.0 million for the year ended January 2012 compared to $624.0 million for the prior year. This resulted in operating profit of $56.5 million, compared to an operating profit of $68.3 million last year. Included in the fiscal 2012 results was a non-cash $13.0 million charge ( $8.4 million after tax) related to the de-recognition of certain components of the backfill plant at the Diavik Diamond Mine. Excluding this non-cash charge of $13.0 million, the Company's operating profit would have been $69.5 million representing a slight increase over the prior fiscal year.
- EBITDA was $148.2 million compared to $145.4 million in the prior year.
- For the mining segment, the Company sold 2.1 million carats for a total of $290.1 million for an average price per carat of $137 compared to 2.6 million carats for a total of $279.2 million for an average price per carat of $106 in the prior year. The increase in sales resulted from a 29% increase in the Company's achieved rough diamond price per carat. This was partially offset by a 19% decrease in volume of carats sold as the Company elects to hold inventory.
- Rough diamond production for the calendar year 2011 was 6.7 million carats compared to 6.5 million carats in the prior calendar year (on a 100% basis). Rough diamond production was 3% higher than the prior calendar year due primarily to an increase in ore processed.
- Luxury brand segment sales increased 19% (12% at constant exchange rates) to $411.9 million from $344.8 million in the prior year. The increase in sales resulted in operating profit for the year of $19.4 million compared to $14.9 million in the prior year.
- The Company recorded consolidated net profit attributable to shareholders of $25.5 million or $0.30 per share for the year, compared to consolidated net profit attributable to shareholders of $41.5 million or $0.52 per share in the prior year. Excluding the $8.4 million after-tax charge for de-recognition of certain paste plant assets in the mining segment, the Company would have recorded a net profit attributable to shareholders of $33.8 million or $0.40 per share for the period.
- Excluding the paste plant derecognition charge, consolidated net profit decreased primarily due to higher financing expenses related to the Kinross buy-back transaction with the final payment made in August 2011, higher mining exploration expenses and higher income tax expense. The higher income tax expense primarily resulted from the revaluation of both non-monetary assets and liabilities and of the net deferred income tax liability due to foreign exchange fluctuations.
Robert Gannicott, Chairman and Chief Executive Officer stated: "Our own rough diamond prices have now stabilized at levels approximately 20% above the beginning of the year and resumed a steady growth in many categories. This is consistent with the trends that we see in our luxury brand business where strong demand for watches has propelled not only our own timepiece orders but also the pricing of the small diamonds that are used throughout the watch industry. Our jewelry sales continue to show strong growth in the bridal and collection jewelry segments that we have targeted as a keystone of our expansion plans as we service not only new markets in China but also broaden our offering in our home market in the US."He continued, "In light of Rio Tinto`s review of its diamond business, including the Diavik Diamond Mine, Harry Winston has decided, not to release a full life of mine plan for the Diavik project at this time in the expectation that project parameters may change in the course of this review."
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