Revenue Down, Profit Up for Namdeb

Namdeb Diamond Corp. said Thursday that diamond sales revenue dropped 9 percent to $2.3 billion Namibian dollars ($315.3 million) for the first half of 2007 due to the effect of the price correction in the rough diamond market in the second half of 2006. Carats sold for the period are slightly ahead of the same period in 2006 because of increased land production and the favorable timing of the in-port periods of the marine vessels.

Profit before tax increased 17 percent to N$555 million ($76 million), due to the decrease in prospecting charges and other operating expenses, the company said. Taxation for the half year amounts to N$406 million ($55.6 million) compared with taxation of N$435 million ($59.6 million) in 2006, which represents 73 percent of pre tax profits, compared with 92 percent of pre-tax profits in 2006.

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, the company said.

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—a joint venture marketing company between De Beers and the Namibian government responsible for valuing, sorting, selling, and marketing of Namdeb’s production, the company said.

“General performance of the first half of 2007 shows an increase in net profit compared to the same period last year,” said Inge Zaamwani-Kamwi, Namdeb Managing Director. “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 are 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.”