Harry Winston Diamond Corporation reports fiscal 2013 second quarter results

Thursday, Sep 06, 2012

TORONTO, Sept. 5, 2012 /PRNewswire/ - Harry Winston Diamond Corporation (TSX: HW, NYSE:HWD) (the "Company") today announced its second quarter Fiscal 2013 results for the quarter ending July 31, 2012.

Robert Gannicott, Chairman and Chief Executive Officer stated, "This quarter has seen transaction numbers and margins grow in our luxury goods segment even as we have withheld rough diamonds, from a soft diamond market, rather than sell at depressed prices."

Outlook

The Company issued an updated life-of-mine plan in August for the Diavik Diamond Mine with a $2.6 billion net asset value on a 100% basis based on reserves and resources including A-21.

The plan for calendar 2012 Diavik Diamond Mine production remains at approximately 8 million carats (100% basis).  Looking beyond calendar 2012, the objective is to fully utilize processing capacity with a combination of production from the underground portions of A-154 South, A-154 North and A-418 supplemented by the A-21 open pit. The A-21 pre-feasibility study currently being undertaken assumes that the A-21 pipe will be mined with the open pit methods used for the other pipes. A dike would be constructed similar to the two other pits but smaller in size. Detailed plans are still being refined and optimized and no underground mining is being planned. The capital expenditures are estimated to be in the region of $500 million (100% basis) at an assumed average Canadian/US dollar exchange rate of $1.00.

The Company expects the trend of wealth creation in emerging markets combined with increasing tourism to remain key drivers of increasing demand for luxury jewelry and watch products. Over the long term, consumer brand loyalty for luxury products is expected to remain strong. The Company is well positioned moving into the second half of the year, supported by a strong advertising campaign and product assortment, and its global distribution network in prime locations. A new directly operated salon was opened in the Harrods department store in London, England, in August 2012 and a directly operated salon is expected to be opened early next year in Geneva, Switzerland. A new licensed salon was opened in May in Moscow, Russia. In addition, a new licensed salon is expected to be opened in Kuwait City, Kuwait in late 2013. The Company also plans to expand by 24 wholesale watch doors to 220 doors by the end of fiscal 2013.

Conference Call and Webcast

Beginning at 8:30AM (ET) on Thursday, September 6th, the Company will host a conference call for analysts, investors and other interested parties. Listeners may access a live broadcast of the conference call on the Company's investor relations web site at http://investor.harrywinston.com or by dialing 866-825-3354 within North America or 617-213-8063 from international locations and entering passcode 42016423.

An online archive of the broadcast will be available by accessing the Company's investor relations web site at http://investor.harrywinston.com. A telephone replay of the call will be available one hour after the call through 11:00PM (ET), Thursday, September 20, 2012 by dialing 888-286-8010 within North America or 617-801-6888 from international locations and entering passcode 24805897.

About Harry Winston Diamond Corporation

Harry Winston Diamond Corporation is a diamond enterprise with premium assets in the mining and retail segments of the diamond industry. Harry Winston supplies rough diamonds to the global market from its 40 percent ownership interest in the Diavik Diamond Mine.  The Company's luxury brand segment is a premier diamond jeweler and luxury timepiece retailer with salons in key locations, including New York, Paris, London, Beijing, Shanghai, Hong Kong, Singapore, Tokyo and Beverly Hills.

The Company focuses on the two most profitable segments of the diamond industry, mining and retail, in which its expertise creates shareholder value. This unique business model provides key competitive advantages; rough diamond sales and polished diamond purchases provide market intelligence that enhances the Company's overall performance.

SOURCE Harry Winston Diamond Corporation