Dominion Diamond profit up on sale of retail arm

TORONTO, Canada - Dominion Diamond Corp, formerly known as Harry Winston Diamond Corp, posted a sharp increase in first-quarter profit on the sale of its branded retail business to Switzerland's Swatch Group.

Net profit attributable to shareholders was $500.2 million, or $5.82 per share, in the quarter ended April 30, the company said late Wednesday. The luxury group sale accounted for $497.6 million of that profit.

Excluding the sale and other one-time items, earnings were 3 cents a share, below analysts' average forecast of 9 cents, according to Thomson Reuters.

The company earned $11.6 million, or 14 cents a share, a year earlier.

Sales rose 22 percent to $108.8 million with the addition of rough diamonds from the Ekati mine in Canada's Northwest Territories.

Dominion struck a deal to buy Ekati from BHP Billiton in November, betting that rising rough diamond prices could extend the life of the mine. The deal closed on April 10.

The diamond miner said it was reviewing the Ekati mine plan and operating budget. It foresees production of some 1 million carats at the mine through the end of the calendar year.

Separately, in January the company agreed to sell its branded luxury jewelry business to Switzerland's Swatch and focus on mining diamonds. It changed its name to Dominion Diamond.

The Toronto-based company also owns a 40 percent stake in the Diavik diamond mine, also in the Northwest Territories, which is operated by Rio Tinto.