NAMIB Desert Diamonds (Namdia) chief executive Alisa Amupolo says for the first time since its inception, the company has sold diamonds at a price higher than the standard selling price (SSV), which has contributed to the company’s N$3,1 billion revenue.
This was announced during the company’s annual report launch and dividend declaration for the 2022/23 financial year yesterday in the capital.
“Namdia conducted nine sales with an average buying price of US$581 per carat and an average selling price of US$669 per carat. This resulted in margins of 15,2% above SSV, marking the company’s highest profitability since its establishment,” said Amupolo.
Namdia’s purchase entitlement went up by 24,9% to a total of 278 609 carats, with much of this increase attributed to the enhanced production of Namibian diamonds following the launch of the diamond recovery vessel, Benguela Gem, in March 2022.
Namdia has over the years paid more dividends than its profit after tax, however, in the current financial year the company will be giving N$300 million in dividends to the government from its N$409 million profit after tax.
According to Amupolo, the performance can be attributed to an increased purchase entitlement, the diversification of their sales channels, and the strong performance of the diamond industry during the first half of 2022.
Speaking at the launch, Namdia board chairperson Bryan Eiseb said this is the company’s highest dividend ever.
“This dividend declaration underscores the strength of our business model and the new five-year strategic plan adopted by the board,” said Eiseb.
THE FINANCIAL STATS
During the 2023 financial year, which ended in February, the company sold diamonds worth N$3,1 billion. This is a massive increase on the sales front from just N$1,9 billion earned for the 2022 financial year, while N$490 000 was invested in staff training and N$1 million in employee welfare.
The company’s financial statements reveal that operating costs amounted to N$75,8 million, compared to N$68,6 million in the previous year.
Namdia paid N$202 million in income tax for the 2022/23 financial year.
Total assets stood at N$870 million, with total liabilities amounting to N$113 million.
According to Amupolo, the company invested N$5 million in various corporate social responsibility initiatives for this current financial year.
Namdia buys its 15% entitlement from the Namibia Diamond Trading Company (NDTC)
NDTC is a 50:50 joint venture between the Namibian government and De Beers Namibia Holdings, using a revolving overdraft. This overdraft is settled when they sell diamonds, which are priced in US dollars.
They have a banking arrangement with Rand Merchant Bank (RMB) Namibia, secured by a N$145 million fixed deposit renewed at US$27 million in December 2021.
This facility incurs interest based on a credit margin above the London Interbank Offered Rate, but it hasn’t deterred them from paying significant dividends.
– shania@namibian.com.na
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