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TORONTO - Dominion Diamond Corp. (TSX:DDC) dipped into the red ink in its most recent quarter, with the company formerly known as Harry Winston citing a decision to hold back on inventory among reasons for its "modest loss."
"We continue to progress all of our operational and strategic objectives at Ekati (mine) while Diavik also continues to trim both capital and operating costs," chairman and CEO Robert Gannicott said in announcing results Tuesday after markets closed.
"The modest loss this quarter reflects expenditures on the Jay project and a decision to hold inventory of some diamond parcels during the Diwali holiday season in India," Gannicott said.
Although retail demand in the key markets of the U.S., China and Japan remains firm, tightened credit terms available to the polishing industry have recently led to softened prices for rough diamonds, the company said.
As a result, Dominion Diamonds decided to hold $95 million of rough diamond inventory available for sale as stock at the end of the quarter "in the anticipation of improved demand."
For the third quarter ended Oct. 31, Dominion Diamond posted a net loss attributable to shareholders of $2.9 million or three cents per share compared with a net profit $3.4 million or four cents per share in the third quarter of the prior year.
Consolidated sales from continuing operations were $151.6 million for the quarter, compared with $84.8 million in the prior-year period.That resulted in an operating profit of $10.7 million, compared with an operating profit of $5.6 million a year earlier.
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