Strong Rough Diamond Prices, Increased Production, and Gains at Harry Winston Drive Aber's Annual Earnings Higher
March 14 2006 - 5:43PM
PR Newswire (US)
TORONTO, March 14 /PRNewswire-FirstCall/ -- ABER DIAMOND
CORPORATION (TSX- ABZ, NASDAQ-ABER) announces its fourth quarter
and year-end results for the periods ended January 31, 2006.
Commenting on Aber's results, Chairman and Chief Executive Officer
Robert Gannicott stated, "The last financial year has been a
rewarding one for Aber and its shareholders as sales volumes,
prices and earnings have increased in both segments of its diamond
businesses. The whole has indeed been shown to be worth more than
the sum of its parts in this unique business model. The Aber -
Harry Winston team has demonstrated the economic synergy between
jeweler and rough diamond marketer. We now have the opportunity to
capitalize on that synergy in a market place that is expected to
increasingly demand the high quality rough diamond and jewelry
products that Aber supplies and understands." Thomas O'Neill,
President of Aber and Chief Executive Officer of Harry Winston
added, "Harry Winston has once again shown double-digit growth in
annual sales and strengthened margins in line with the plan we laid
out when we acquired the company in April 2004. These gains are the
result of the refinements we made to our product mix and
improvements in sourcing, purchasing and manufacturing, along with
strong performance in our core markets of the U.S. and the Far
East. By combining financial capital and management expertise,
Harry Winston is strengthening its position as the pre-eminent
purveyor of fine diamond focused jewelry while growing a more
accessible high-end diamond jewelry brand in order to deliver
long-term value to our shareholders." Fourth Quarter and Annual
Highlights Financial Highlights
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Three Three Twelve Twelve months months months months ended ended
ended ended January 31, January 31, January 31, January 31, 2006
2005 2006 2005
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Sales ($ millions) 126 145 505 385
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Earnings from operations ($ millions) 36 39 176 122
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Net Earnings ($ millions) 15 30 81 53
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Earnings per share ($) 0.26 0.51 1.40 0.92
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Cash Earnings per share ($)(1) 0.66 1.20 3.57 2.96
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(1) Cash earnings per share is not a recognized measure under
Canadian GAAP and does not have a standardized meaning prescribed
by Canadian GAAP and is therefore unlikely to be comparable to
similar measures presented by other issuers. Cash earnings per
share is earnings before non-cash income tax expense, non-cash
foreign exchange gains (loss), and depreciation and amortization on
a per share basis. See "Non-GAAP Performance Measures" in the
Company's Management's Discussion and Analysis for the three months
ended January 31, 2006, for a reconciliation of earnings to cash
earnings. Production Highlights (Aber's 40% share of Diavik Mine
production)
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Three Three Twelve Twelve months months months months ended ended
ended ended December 31, December 31, December 31, December 31,
2005 2004 2005 2004
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Diamond recovered (000s carats) 732 601 3,309 3,030
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Grade (carats/tonne) 3.68 3.30 3.72 3.88
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Operating costs, cash ($ millions) 20.8 20.1 76.6 70.0
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Operating costs per carat, cash ($) 28 33 23 23
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"Fiscal 2006 has been another year of significant sales growth,
robust margins and record earnings from both our mining and retail
segments. In addition to our record revenue levels our annual gross
margin continues to strengthen. These margins, being 59% and 51%,
for our mining and retail segments respectively, generated record
net earnings of $81 million dollars for the year just ended,"
stated Alice Murphy, Aber's Chief Financial Officer. "These robust
earnings fuelled a working capital balance now in excess of a
quarter billion dollars, ensuring that the Company is well
positioned to continue to fund Diavik and Harry Winston capital
requirements and other strategic growth opportunities, as well as
continuing to reward its shareholders through its ongoing dividend
program." UPDATED RESERVE AND RESOURCE STATEMENT Aber Diamond
Corporation has been provided with an updated mineral reserve and
mineral resource statement, which has an effective date of December
31, 2005, for the Diavik Mine by Diavik Diamond Mines, Inc.
operator of the Diavik Mine. Delineation drilling completed during
2005 on the A-154 South, A-154 North and A-418 kimberlite pipes in
order to further define the shapes of the resource bodies and
production data gathered since the beginning of operations has
supported an update to the geological model which estimates the
mineral reserves and mineral resources contained within the ore
bodies. This information is incorporated in the mineral reserve and
mineral resource tables below. Proven and probable reserves Open
Pit and Proven and Underground Mining Proven Probable Probable Mt
Ct/t Mcts Mt Ct/t Mcts Mt Ct/t Mcts A-154 South 5.2 4.7 24.8 4.1
4.4 17.9 9.3 4.6 42.7 A-154 North 3.7 2.0 7.3 6.3 1.9 11.8 10.1 1.9
19.1 A-418 5.0 3.2 16.1 3.7 3.3 12.3 8.7 3.3 28.4 ----- --- ----
--- ---- --- ---- Total 14.0 3.5 48.2 14.2 3.0 42.0 28.1 3.2 90.2
Note: Totals may not add up due to rounding Additional inferred
resources Inferred resources Kimberlite Millions Carats Millions
Pipe of tonnes per tonne of carats A-154 South 0.6 3.9 2.3 A-154
North 1.8 2.3 4.2 A-418 0.6 4.2 2.3 A-21 4.8 3.0 14.6 ---- --- ----
Total 7.8 3.0 23.4 Note: Totals may not add up due to rounding The
above mineral reserve and mineral resource estimates were prepared
by Diavik Diamond Mines, Inc. operator of the Diavik Mine.
Returning Value to Shareholders Aber is pleased to declare a
quarterly dividend payment of US$0.25 per share. Shareholders of
record at the close of business on March 29, 2006, will be entitled
to receive payment of this dividend on April 13, 2006. Webcast and
Conference Call Details Aber will host a conference call and
webcast with accompanying presentation tomorrow, March 15, 2006, at
9:00 a.m. (EST), accessible on http://www.aber.ca/. Within North
America, access to the call is available by dialing (800) 510-9661,
participant passcode 26400882. From International locations, call
(617) 614-3452 using the same passcode. Please dial into the
conference 10 minutes prior to the start of the call. A replay of
the call and webcast will be available on the Company's website at
http://www.aber.ca/ later the same day. Aber's press release of its
audited consolidated financial statements together with
Management's Discussion and Analysis are available on the Company's
web site and on SEDAR (http://www.sedar.com/). Information in this
news release that is not current or historical factual information
may constitute forward-looking information or statements within the
meaning of applicable securities laws. Implicit in this
information, particularly in respect of statements as to future
operating results and economic performance of Aber, and resources
and reserves at the Diavik Mine, are assumptions regarding
projected revenue and expense, diamond prices and mining costs.
These assumptions, although considered reasonable by Aber at the
time of preparation, may prove to be incorrect. Readers are
cautioned that actual results are subject to a number of risks and
uncertainties, including risks relating to general economic
conditions and mining operations, and could differ materially from
what is currently expected. The Company disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
MD&A and financial statements to follow About Aber Aber Diamond
Corporation 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 40% ownership in
the Diavik Diamond Mine, located off Lac de Gras in Canada's
Northwest Territories. Aber also holds approximately a 53% interest
in Harry Winston Inc., the premier retailer of diamond jewelry.
DATASOURCE: Aber Diamond Corporation CONTACT: Robert A. Gannicott,
Chairman and Chief Executive Officer, (416) 362-2237; Amir Kalman,
Director, Investor Relations, (416) 362-2237 (ext. 244)
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