| Canadian diamond enterprise Harry Winston Diamond Corporation, with assets in the mining and retail segments of the diamond industry, reported that consolidated sales for the fourth quarter, ending January 31, 2010, totaled $133.7 million, a 13% increase compared to sales of $118.4 million in the comparable quarter of the prior year. Rough diamond sales for the quarter totaled $63.5 million compared to $51.1 million in the comparable quarter of the prior year resulting from a combination of a 12% increase in the company's achieved rough diamond prices and an 11% increase in volume of carats sold. Rough diamond production during the quarter was significantly lower than the comparable quarter of the prior year due to a planned reduction in mining activity to reflect the softness in the rough diamond market earlier in the year, the company said in its fiscal 2010 annual report. Retail sales for the fourth quarter were $70.2 million compared to $67.3 million for the comparable quarter of the prior year, an increase of 4%, "reflecting the strength of the Asian market and offsetting continuing slowness in the US," the company said. During the first half of fiscal 2010, the rough diamond market experienced substantial price weakness as the industry was significantly impacted by the global financial crisis and the resulting economic slowdown. Stability returned to the rough diamond market during the third quarter of the year and prices strengthened considerably. This recovery continued in the fourth quarter, with rough diamond prices closing the year only slightly below the market highs achieved in fiscal 2009. Sustained demand from the Far East and India was coupled with a cautious renewal of interest from US retailers. The availability of credit improved as banks responded to the positive diamond market by reducing the tight credit restrictions imposed during the global financial crisis. "The price of polished diamonds, which experienced a less significant decline than rough diamond prices, has almost returned to previous levels and even surpassed these in certain popular ranges. "The outlook for the diamond market for fiscal 2011 is positive, with evidence of increased consumer demand in the Far East and India, coupled with the reawakening of the US retail sector, providing the basis for continued expected price growth in rough diamonds," said the company in its fiscal 2010 report. Harry Winston recorded a fourth quarter consolidated net loss of $3.4 million compared to a net loss of $73.0 million in the fourth quarter of the prior year. Annual Results The company recorded a consolidated net loss of $73.2 million for fiscal 2010, compared to net earnings of $70.1 million in the prior year. Consolidated sales were $412.9 million for the year compared to $609.2 million for the prior year. For the full fiscal year, the mining segment recorded sales of $187.9 million, a 43% decrease from $328.2 million in the prior year. Harry Winston's share of rough diamond production for the calendar year was 2.2 million carats compared to 3.7 million carats in the prior year. As a response to the softness in the rough diamond market, production was reduced through a planned six-week summer shutdown from July 14, 2009 to August 24, 2009 and a general reduction in mining activity throughout the rest of the year. The significant reduction in sales resulted in a loss from operations for the year of $6.3 million. Sales for the fiscal year ended January 31, 2010, totaled $225 million and a loss from operations of $15.7 million for the year, compared to $281.0 million and $2.5 million, respectively, in the prior year. Sales in Asia increased 11% to $77.0 million, US sales decreased 22% to $72.9 million and European sales decreased 36% to $75.1 million. "We end the year with a quarter that reflects recovery in both the rough diamond and jewelry businesses, but in a diamond business significantly changed from the years before the downturn," said Robert Gannicott, Chairman and Chief Executive Officer. "Prior to the downturn, diamond mine production was at extreme capacity and is not capable of returning to those levels, at least in the near-term. Rough diamond prices have already reacted and are back near the peaks of mid-2008. We anticipate further price increases as recovery in the US, and probably later in Europe, is added to ongoing growth in demand from China and India." Continued Gannicott: "In 2007 barely 5% of our retail sales were to Asian customers outside of Japan. For this last year that same group accounts for 18% of our sales with an increase of nearly 200% between this and the prior fourth quarters. The momentum in retail sales has continued and accelerated into the new-year." The Retail Jewelry Market The luxury diamond jewelry market was also negatively affected by the depth and duration of the global economic recession. During the third quarter of the year, signs of recovery began to appear, particularly in Asia. In the US, many retailers reported a stronger holiday season than in the previous year as overall consumer sentiment appears to be more positive. The global economy continues to recover from the recession at varying rates depending on the region. Checkout some beautiful diamond bracelets at RoyalDesignOnline.com. |
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