Namdia’s profit loses shines

10 September 2020 | Business

Jo-Maré Duddy – Namib Desert diamonds (Namdia), government’s diamond marketing and sales company, ended its 2019/20 financial year with a profit after tax of N$95.2 million – a drop of N$66.7 million or 41% compared to its previous book-year.

Namdia decribed its performance as “relatively well”, “despite an extremely challenging year for the diamond industry”.

It declared a dividend of N$80 million to government.

It filled tax coffers with N$63 million, plus N%19 million in export levies.

According to Namdia, it recorded ten sales during the period under review. In total, 253 073.37 carats were sold at an average price of US$528.64 per carat.

Namdia said its “positive financial performance is attributed to a well-executed strategy that focuses on revenue maximisation for Namibian diamonds; optimisation of the sales strategy and robust internal processes and procedures”.

Challenges

During 2019 the global diamond industry was battling with a number of challenges, the commercial SOE said.

“Amongst them were lack of bank financing; the depreciation of the Indian rupee; lower profit margins and the competition of synthetics diamonds. The weak downstream sentiment related to macroeconomic and geopolitical factors, including the US-China trade tensions, the impact of the Hong Kong protests and certain macroeconomic issues affecting consumer confidence in India, weighed down on the industry.”

In the last quarter of the year, in mid-January 2020, the diamond industry was profoundly adversely impacted by the outbreak of Covid-19, Namdia said.

“The diamond centres worldwide closed and diamond trading declined sharply in February due to economic uncertainty surrounding the coronavirus.”

‘Resilient’

However, according to Namdia, the “diamond industry remains resilient and will once again revamp itself together with the global economies”.

Namdia said it will continue to focus on delivering on its strategy in 2020, maintaining a disciplined approach to its mandate and sales strategy whilst working to grow its cash flow and returns.

“Namdia’s strategy to deliver a world-class product is working and continues on a positive upward trajectory. The diamond industry plays an important role in the socio-economic development of our economy and Namdia continues to be committed to its contribution to the economy and the upliftment of the Namibian people,” it said.

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