Namib Desert Diamonds (Namdia) was not spared from the general downturn of economic activity, particularly pertaining to luxury goods, brought about by the global pandemic. Its latest annual report, released yesterday, confirmed the local diamond marketing and sales company’s profit after tax fell by 41% to N$95.2 million during the 2019/20 financial
This is compared to N$161.9 million during the 2018/19 fiscal year and N$139 million the year before (2017/18).
The latest results also show that the company, headed by CEO Kennedy Hamutenya, who used to be a diamond commissioner at the mines ministry, declared a dividend of N$80 million to government and paid taxes of about N$63 million to the finance ministry.
Company spokesperson, Beverley Coussement said Namdia performed relatively well during 2019/2020, despite an extremely challenging year for the entire diamond industry.
“This 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,” said Coussement.
The latest report summarises a global diamond industry battling a number of challenges, including a lack of bank financing, a depreciation of the Indian rupee, lower overall profit margins and of course increased competition from synthetics diamonds.
Additional factors include the closing of diamond centres when the coronavirus crisis hit, with the result that diamond trading already started declining sharply in February.
Despite these challenges, Coussement stated that Namdia had a good year, adding that “the diamond industry remains resilient and will once again revamp itself together with the global economies”.
She continued that weak downstream sentiment related to macroeconomic and geopolitical factors, such as the US-China trade tensions, the impact of Hong Kong protests and lacking consumer confidence in India, heavily weighed down the industry.
On the retail front, for the full year, Namdia concluded 10 sales totalling just over 253 073 carats for an average of US$528.64 per carat and recorded an export levy of N$19 million. During the 2018/19 period, it also had 10 sales but for 304 033 carats at an average of US$552.58 per carat.
Coussement noted that Namdia 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.
During the year under review, Namdia invested close to N$810 000 in staff training, development and welfare.