Harry Winston Diamonds profits decreased, however revenues were higher this quarter
Profits slip for Harry Winston Diamonds
Posted September 13, 2011 | By Aaron Weinman
Harry Winston Diamonds saw sharply reduced profits in the second quarter for 2011.
The Toronto-based jeweller recently reported that its profit in the quarter ending 31 July was US$10 million, compared to US$13 million in the previous corresponding period.
The company attributed its drop in profits to higher costs and expenses, claiming that the cost of sales increased 75 per cent to US$150.2 million and expenses up 29 per cent to US$49.1 million.
Despite the decrease in profits, revenue during the company’s fiscal 2012 second quarter was US$222.4 million, up from the US$153.7 million, mainly as a result of increased sales in its luxury brand retail segment.
Company chairman and CEO Robert Gannicott, said in a press release that “global retail demand, especially in the emerging economies such as China and India has delivered strong retail sales and strong rough diamond prices.”
Harry Winston’s mining revenue totalled US$89.6 million in this quarter, closing higher than the US$86.8 million figure record in the same period last year.
Its luxury segment performed strongly, producing revenues of US$132.8 million; almost double the US$66.9 million generated at end July 2010.
“Seeing through the effect of a small number of high-value, lower margin sales, our own jewellery and timepiece business shows solid growth in both sales and margin in bridal, timepiece and designed jewellery segments,” Gannicott said.
Harry Winston supplies rough diamonds to the global market from its 40 per cent ownership interest in the Canadian-based Diavik diamond mine, while its luxury retail segment operates stores in major cities around the world.
The results follow Jeweller’s recent report that Australian investors are to be given a chance to contribute to a diamond asset fund between Harry Winston and Zurich-based advisor, Diamond Asset Advisors (DAA), which aims to raise US$250 million.
The Diamond Asset Fund 1 (DAF 1) local division will be managed by Melbourne-based investment banking firm, Bristow Shaw and Company, which hopes to raise approximately AU$25 - $30 million.
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