Harry Winston Diamond Corp. on Monday said its fourth quarter sales increased 22 percent to $188.2 million. Consolidated earnings from operations totaled $59.1 million, a 59 percent increase over the comparable quarter of the prior year. As a result, net earnings grew to $90.4 million compared to $27.3 million for the fourth quarter of the prior year.

Net earnings for the fourth quarter, ended Jan. 31, were impacted by a $22.3 million foreign exchange gain related principally to an unrealized non-cash gain on future income taxes payable as compared to a foreign exchange gain of $9.8 million in the comparable quarter of the prior year. Also impacting the fourth quarter are a future income tax recovery of $22.4 million and an after-tax gain of $8 million pertaining to an insurance settlement.

Annual sales grew 22 percent to $679.3 million with consolidated earnings from operations increasing 48 percent to $217.7 million for fiscal 2008, ended Jan. 31. The company posted net earnings of $106.4 million for fiscal 2008 compared to net earnings of $104.3 million in the prior year. Net earnings for the year were reduced by a net $43.4 million foreign exchange loss related primarily to an unrealized non-cash loss on future income taxes, compared to a net $8.8 million foreign exchange gain in the prior year. The loss is a result of the 17 percent strengthening of the Canadian dollar relative to the US dollar during the year.

Based in Toronto, Canada, Harry Winston Diamond Corp. is a specialist diamond company focusing on the mining and retail segments of the diamond industry. The company supplies rough diamonds to the global market through its ownership of a 40 percent interest in the Diavik Diamond Mine, located in Canada’s Northwest Territories. At the other end of the diamond industry, the company owns Harry Winston Inc., the luxury diamond jewelry and watch retailer.

“We are pleased with our progress this past year in building an increasingly profitable business. Our two premium assets, at the most profitable poles of the diamond business, inform each other with respect to pricing and polished diamond supply,” said Robert Gannicott, Harry Winston Diamond Corp. chairman and chief executive officer. “This enables rough diamond sales from the mine to be priced quickly and accurately against market changes. It also connects the jewelry and watch business directly to the diamond polishers that are the mine’s customers making a more efficient supply chain.”

Gannicott added, “On the mining side, we now have a mine plan in place that confirms the mine life beyond 2020. After processing more than 41 million carats of diamonds since production began five years ago, there are still more than 77 million carats in proven and probable reserves with an additional 11 million in inferred resources. In our growing retail business, we posted record global sales for the fiscal year and we opened our eighteenth retail salon, tripling our retail portfolio since we acquired Harry Winston Inc.”

He concluded, “We look forward to a year of growth in global diamond demand generally and especially for the high quality diamond jewelry that is the trademark of Harry Winston and its worldwide retail network.”

“Our retail business continued to grow substantially last year as we achieved record sales, said Thomas J. O’Neill, president of Harry Winston Diamond Corp. “Demand for our highly designed jewelry continues to be very strong despite uncertain domestic economic conditions. Our customers are truly international clients. We have experienced a noticeable shift in our customer base from what had been a U.S. dominated market to one where the U.S. customer accounts for one third of our global sales. Our new fiscal year is off to a good start in retail sales and we will continue to focus on the high-net worth individuals in markets such as Russia, China, the Middle East, and India to drive our luxury diamond jewelry and timepiece business.”

JCK