Dominion Diamond (TSE:DDC) rose in midday trades after swinging to a profit in its fiscal second quarter as revenue improved and the cost of sales declined.
Shares gained 2.5 percent to C$14.98 at 1:57 p.m. in Toronto, extending gains over the past year to 12 percent.
Net income was $26.6 million, or $0.31 per share, in the three-month period ended July 31, compared with a loss of $13.9 million, or $0.16 per share, in the year-earlier period, the Toronto-based company said in a statement late yesterday.
Revenue increased to $277.3 million in the second quarter from US$261.8 million year over year.
The cost of sales fell to $221.2 million from $231.1 million and gross margins improved to $56.1 million, or 20.2 percent from $30.7 million, or 11.7 percent.
"It is a pleasure to be able to report another quarter that exceeds expectations," Robert Gannicott, chief executive officer of Dominion Diamond, said in the statement. "We have embedded improvements to diamond recovery, rough diamond marketing and cost control efficiencies to deliver a story that continues to improve."
The company said the first six months of the year had seen continuing growth in diamond jewellery sales in the United States and the mass market in China, which together account for over half of the world's diamond jewellery.
As a result, rough diamond prices have risen about eight per cent, said Dominion, which has interests in two diamond mines in the Northwest Territories — an 80 percent interest in the Ekati mine and a 40 percent minority stake in the Diavik mine in a joint venture with Rio Tinto.