Aber Q1 Net Earnings Slashed Due to Falling US$
June 06, 07
Diamond firm Aber reported a sharp drop in net earnings in the first quarter, despite a reported 18.49 percent rise in sales. Rough diamond sales were $82.752 million during the quarter and retail sales $58.613 million.
The firm has two main assets, luxury retailer Harry Winston and a 40 percent stake in the Diavik diamond mine.
Sales growth of 19 percent in rough diamond sales and 17 percent in retail sales were eaten away by a “non-cash, mark-to-market adjustment on future income taxes, resulting from the 6 percent strengthening of the Canadian dollar against the US dollar during the quarter,” CFO Alice Murphy said in a release.
“This $13.6 million mark-to-market charge to earnings compares to a future income tax recovery of $10.4 million included in our prior year's results,” she added.
“Diamond production set a new first quarter high despite a seasonally cold winter with recovered grades being 12 percent above ore reserve levels,” Chairman Robert Gannicott said. Aber’s 40 percent share of production amounted to 1,034,000 carats, recovered at an operating cost of $24 per carat.
On the retail side, Harry Winston suffered a $1.1 million loss, compared to earnings of $2.4 million for the comparable quarter of the prior year. The loss is mainly the result of “certain acquisition-related costs of $2.3 million specifically attributable to the Harry Winston purchase,” the company said.
Harry Winston currently has 14 locations and plans to open four new locations later this year.
Aber has declared a quarterly dividend of $0.25 per share.