Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Announcing its third quarter on Thursday, Harry Winston (TSX:HW) reported a $4.7 million loss and said it is keeping some of its diamonds on ice.
“Challenging trading conditions returned to the diamond business internationally in the third quarter,” said Robert Gannicott, Chairman and Chief Executive Officer.
“However, this was not the sudden, hard shock of 2008/2009 and, being better equipped to weather a downturn than in 2008/9, we elected not to sell the full rough diamond production into a weak market during the quarter but continued to supply the segments where demand remained resilient.”
The company’s mining segment sales tumbled to $36.2 million, down 40% from $60.7 million in the same quarter a year ago.
Rough diamond production was up 8% to 0.8 million carats compared to 0.7 million carats compared to year ago.
“For the luxury brand segment, sales were $83.5 million compared to $80.2 million in the same quarter of the prior year, an increase of 4% or a decrease of 4% at constant exchange rates,” said the company.
Harry Winston has a 40% ownership interest in the Diavik Diamond Mine, located in Canada’s Northwest Territories. It also runs high-end jewelry stores in London, New York and Beijing.
Last month BHP Billiton announced that it may step away from the diamond mining in Canada.
Image by edoardocosta
