Namib Desert Diamonds has produced its strongest financial results ever during the 2022/2023 financial year. The State-owned diamond marketing entity increased its revenue by 63% to N$3.1 billion, compared to the N$1.9 billion generated in the previous financial year.
Namdia is the rough diamond sales and marketing channel of the Namibian government.
In terms of the diamond sales and marketing agreement, Namdia is entitled to purchase, on behalf of government, 15% of the representative cut-off of Namdeb Holdings’ total run-of-mine production per annum. These diamonds are acquired directly from the Namibia Diamond Trading Company (NDTC).
Having been established in 2016, Namdia yesterday announced a record dividend declaration of N$300 million to government coffers.
At yesterday’s dividend declaration, Namdia board chairperson Bryan Eiseb said despite all circumstances, it is time to start rethinking the 50% shareholder arrangement with Namdeb.
“At this point in time, we are nearing the end of a 10-year sales and marketing agreement and when we start preparing to go to the negotiation table, I believe it is important that we renegotiate that window that was opened a few years ago at 15%. That window now needs to be pushed much wider so that we can experience and enjoy the benefits of our Namibian diamonds,” Eiseb urged at the launch of Namdia’s 2022 to 2023 annual report and the dividend declaration.
The board chair further tackled the issue of local beneficiation, stressing that for over 100 years, local diamonds have been exported in rough form.
“As a government and an institution, we are now in a position to demand more in the sense that our diamonds must be cut and polished locally in Namibia. But that’s insufficient. To ensure that we sell our diamonds to companies with a presence in Namibia for the benefit of Namibians, I think Namdia has demonstrated our ability to sell our diamonds at greater prices,” he added.
Financial performance
During the 2022/23 financial year, Namdia recorded a gross profit of N$628 million, compared to N$284 million in the previous year. This resulted in profit before tax of N$612 million, compared to N$218 million in the 2021/2022 financial year, and a profit after tax of N$409 million in comparison to N$144 million in the 2021/2022 financial year.
Namdia’s exceptional performance can be attributed to the 24.9% increase of its purchase entitlement as well as the diversification of Namdia sales channels to include competitive bidding.
Accepting the dividend on behalf of government, deputy finance minister Maureen Hinda-Mbuende said the disbursement represents more than just monetary value as it actually represents the potential to create a brighter future for Namibia and its people.
“The dividend we received today is a testament to the dedication of Namdia to contribute to the economic wellbeing of Namibia. This substantial contribution will undoubtedly support the government’s efforts in various sectors, ultimately benefiting our people and advancing our nation’s development goals,” said the deputy minister.
She further appreciated Namdia’s commitment to transparency, accountability and ethical business practices and most importantly, its social investment.
Hinda-Mbuende also reaffirmed government’s commitment to explore more windows in supporting initiatives to realise real value not only for the diamonds, but also from all other natural resources.
In Namibia, the diamond industry makes up 40% of export revenue, and in 2022, it contributed 6% to the gross domestic product (GDP) and 9% to government revenue. Despite its fair share of challenges in recent years, the diamond industry remains brilliant and resilient.
Strategic review
Presenting Namdia’s strategic overview yesterday, CEO Alisa Amupolo affirmed the Russia-Ukraine war had a significant impact on global market dynamics. The conflict impacted consumer spending in the USA and China, the biggest markets for diamond jewellery.
Amupolo noted, on the other hand, the conflict shifted sourcing demand, which together with inventory restocking post-Covid-19 helped to create favourable market conditions, thereby driving up both prices and demand.
“Going forward, the signing of a new 10-year sales agreement between De Beers and the government of the Republic of Botswana could have wider significance for the Namibian and global diamond industry,” Amupolo added.
The CEO also revealed that Namdia concluded nine sales during the period under review, with its purchase entitlement increasing by 24.9%, from 222 978 carats in the previous year to 278 609 carats.
After undergoing the selection process in line with Namdia’s client selection policy, the company also increased its client base from 16 to 36 in March 2022. The clients represent most of the diamond trading centres across the globe, namely India, Dubai, Belgium, Israel, Namibia and the United States.
(Namdia)