Namdeb diamond sales decline, outlook negative

REVENUE from diamond sales decreased by nine per cent in the first half of the year, the country’s leading diamond mining company, Namdeb Diamond Corporation, announced last week in its interim results for the six months ending June 2007.

The sales were recorded at N$2,3 billion, compared to the N$2,6 billion recorded during the corresponding period of January to June 2006. Namdeb Managing Director Inge Zaamwani-Kamwi attributed the decrease to the effect of a price correction in the rough diamond market in the second half of last year.The company produced 1,2 million carats during the period under review, of which 1,1 million carats were sold.The outlook for gains to be made this year is negative, due to the timing of the marine vessels’ in-port times, the effect of the recent fire at Diamond Plant Number Three and the timing of major projects.”General performance of the first half of 2007 shows an increase in net profit compared to the same period last year.This was achieved by increased production during the first half of 2007.”It is anticipated that this performance will not be repeated in the second half of 2007, resulting in the forecast net profit for the full year being lower than achieved for the full year in 2006,” said Namdeb in a statement.The company realised a net profit of N$305 million in 2006.The first six months of this year saw a net profit of N$149 million.Profit before tax was up at N$555 million from N$475 million during the same period last year.Namdeb said the 17 per cent increase was due to a decrease in prospecting charges and other operating costs.Prospecting, research and development charges in the first half of the year had decreased because marine dredging expenses incurred last year were not repeated this year.Taxation amounted to N$406 million compared to N$435 million.The establishment of the Namibia Diamond Trading Company (NDTC) through the new sales agreement which came into effect in January also saw other operating expenses reduced.NDTC is a 50-50 venture with the Government.It is a marketing company responsible for the valuing, sorting, selling and marketing of Namdeb’s production.Namdeb Managing Director Inge Zaamwani-Kamwi attributed the decrease to the effect of a price correction in the rough diamond market in the second half of last year.The company produced 1,2 million carats during the period under review, of which 1,1 million carats were sold.The outlook for gains to be made this year is negative, due to the timing of the marine vessels’ in-port times, the effect of the recent fire at Diamond Plant Number Three and the timing of major projects.”General performance of the first half of 2007 shows an increase in net profit compared to the same period last year.This was achieved by increased production during the first half of 2007.”It is anticipated that this performance will not be repeated in the second half of 2007, resulting in the forecast net profit for the full year being lower than achieved for the full year in 2006,” said Namdeb in a statement.The company realised a net profit of N$305 million in 2006.The first six months of this year saw a net profit of N$149 million.Profit before tax was up at N$555 million from N$475 million during the same period last year.Namdeb said the 17 per cent increase was due to a decrease in prospecting charges and other operating costs.Prospecting, research and development charges in the first half of the year had decreased because marine dredging expenses incurred last year were not repeated this year.Taxation amounted to N$406 million compared to N$435 million.The establishment of the Namibia Diamond Trading Company (NDTC) through the new sales agreement which came into effect in January also saw other operating expenses reduced.NDTC is a 50-50 venture with the Government.It is a marketing company responsible for the valuing, sorting, selling and marketing of Namdeb’s production.