Despite recent financial troubles,
The company (Namco) earned US$1 million (or 2 per share) on revenue of US$41.8 million, compared with US$17.1 million (43 per share) on US$42.8 million in 1999. The decrease is due to a 61% increase in direct operating costs, combined with a 128% jump in amortization charges (including goodwill). The increased expenditures, in turn, reflect the takeover of Ocean Diamond Mining (ODM) in late 1999.
Cash flow between the periods also fell, to US$15.9 million from US$22.7 million.
Higher costs also took a toll on the final quarter of 2000, with Namco losing US$1.6 million (4 per share), compared with earnings of US$1.1 million (2 per share) a year ago. However, revenue climbed by 26% to US$10.6 million on the back of higher realized diamond prices.
Namco churned out 221,000 carats last year, far less than in 1999. The drop reflects a 74% decrease in the grade of material mined by the NamSSol mining system, though this was partly offset by newfound production from the ODM airlift vessels. In fact, the vessels cranked out 47% more diamonds than they had historically, reflecting selective mining and a US$5-million upgrade to the MVNamibian Gem.
A total of 237,000 carats was sold in 2000, down from 283,000 carats sold in 1999. Larger stone sizes and improved market conditions saw the miner realize 17% more per carat for its recent production.
Namco continues to seek the discharge of its South African subsidiaries from provisional liquidation. The company has already had some subsidiaries discharged, enabling it to resume production.
Earlier this year, Namco saw its main source of cash flow disrupted when the NamSSol system was damaged at sea. The accident compounded an already-precarious financial position (the company began the year with a working capital deficiency of US$22.4 million), forcing the miner to place key Namibian and South African subsidiaries into provisional liquidation.
Since then, Namco has raised US$27 million by issuing US$15 million worth of shares to the Leviev Group, making that company Namco’s largest shareholder and sole marketing agent.
Despite the improvements, Namco expects 2001 to be another difficult year, though actual production forecasts depend on the release of its remaining subsidiaries from provisional liquidation. All are expected to be released by July.
Meanwhile, commissioning of the Nam2 mining system continues, and the MVNamibian Gem is scheduled to set sale by the third quarter. Nam2 can sweep twice as much ground as its predecessor and operate in more difficult, or lower-grade, environments.
At Dec. 31, Namco’s long-term debt stood at US$54.2 million, of which US$16.5 million was current.
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