By Chrispin Inambao
Namdeb Diamond Corporation last Friday announced its interim results for the first six months of 2007 indicating a slight decrease in revenue from the diamonds sold in comparison to the first half of 2006.
According to Namdeb Managing Director, Inge Zaamwani-Kamwi, carats sold are slightly ahead of the first half of 2006 and this was achieved by increased land production during the first half of 2007 and the favourable timing of the in-port periods of the marine vessels.
The diamond sales revenue was lower by 9 percent at N$2.3 billion compared to the first six months of last year, which was N$2.6 billion and this was mainly due to the effect of the price correction in the rough diamond market in the second half of 2006. On a positive note, profit before tax increased to N$555 million compared N$475 million during the same period in 2006, a 17 percent improvement due to the decrease in prospecting charges and other operating expenses. Taxation for the half year amounts to N$406 million (2006: N$435 million), which represents 73 percent of pre tax profits (2006: 92 percent).
Prospecting and Research and Development charges in the first half of 2007 had decreased due to the Marine Dredging project expenses incurred in 2006 not being repeated in 2007.
Other operating expenses decreased due to the arrangements of the new sales agreement coming into effect in 2007 which led to the establishment of Namibia Diamond Trading Company (NDTC) – a 50:50 joint venture marketing company responsible for valuing, sorting, selling and marketing of Namdeb’s production.
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. The main reasons for this is the timing of the marine vessels’ in-port periods, the effect of the recent fire at No 3-Plant and the timing of major projects like new mini-mines and Pocket Beaches Phase 2.
The fire-ravaged plant will be out of action for several months before it resumes production according the alluvial diamond giant said earlier.
The diamond entity a joint venture between the Namibian Government and De Beers has in recent years made huge capital injections aimed at extracting marine deposits as gems on-land gradually become depleted.
These investments involving state-of-the-art technological advancements runs into hundreds of millions of Namibian dollars.
Diamond mining is one of the mainstays of the local economy contributing significantly to the country’s Gross Domestic Product (GDP).