Rockwell Diamonds Sales Drop 13% in Third Quarter
It falls to to $11.2 million...Rockwell Diamonds reported that sales from operations fell 13 percent year on year to $11.2 million (CAD 11.1 million) in the third fiscal quarter ending November 30, 2011. The company posted a net loss of $1.2 million (CAD 1.2 million) compared with a profit of CAD 1.5 million the previous year.
Sales fell despite a strong recovery in prices of rough from its South Africa operations, up 23 percent to $1,566 per carat, as the number of carats sold declined by 16 percent to 10.045 million carats.
Jeffrey Brenner, marketing and sales manager at Rockwell, explained that the company held back some inventory to sell in January and February, which are traditionally stronger selling periods for the rough market. The company’s inventory stood at 3,865 carats at November 30, compared with 2,801 carats one year earlier. Total production rose 6 percent to 8,404 carats during the three months.
The company noted that the rough price recovery gained momentum during the period, approaching 2008 levels, while the pace of recovery in polished has been slower. “While production levels remain low relative to the record volumes achieved in 2007, ultimately the price of polished stones will have to increase and meet prices paid for rough diamonds,” Brenner said.
Rockwell currently operates three alluvial mines – Holpan, Klipdam and Saxendrift, recently acquired the Tirisano project through its acquisition of Etruscan Diamonds Limited. Graham Chamberlain, chief operating officer (COO) explained that production from Tirsano is ideal for the Indian and Chinese bridal markets and will therefore offer a more consistent cash flow to the company.
Production is expected to launch in March 2011 and is expected to initially supply approximately 1,500 carats per month before it ramps up to production of around 3,000 carats per month.
During the first nine months of the year, Rockwell’s sales rose 38 percent to CAD 30.9 million while its net profit dropped 90 percent to CAD 343,897.
By: Avi Krawitz of RAPAPORT
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