Aber diamond sees 75% increase in profits

Aber Diamond Corp. reported net income of $23.9 million (U.S.) in the three months ending April 30, up 75% from $13.6 million in the corresponding period of 2005, the Canadian Press reported. Sales were up 8.4 percent, from $110.1 million to $119.3 million. Earnings from operations were up just 1.8 percent, from $27.6 million to $28.1 million.

The Canadian company attributed the large profit increase to a tax cut in the Northwest Territories, where it is the 40% owner of the Diavik Mine, resulting in a tax refund of $1 million this year compared to a payment of $12.4 million last year. Other reasons given for the improved financial showing were solid results at the mine and improved sales and margins at U.S. retail jeweler Harry Winston, in which Aber holds a 53% stake.

Aber�s share of rough diamond production at Diavik was 715,000 carats in the three-month period, up from 700,000 carats last year. Rio Tinto plc holds the remaining 60 percent stake in the mine. Aber�s operating expenses for the mine increased to $21.6 million from $18.2 million due to the warm weather that shut down the ice road to the mine early and made it necessary to fly supplies in. In the coming months 8 million tons of fuel and quantities of cement will have to be flown in as well, which could add $9 million to operating costs for the year as a whole and an additional $9 million to capital spending costs. On the other hand, the company said it expects increased rough diamond production during the peak season along with rising prices, following a plateau in prices during the quarter that ended April 30.