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Dominion Diamond swing to Q2 profit of US$26.6M; reverses year-earlier loss

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TORONTO - Dominion Diamond Corp. (TSX:DDC) swung to a profit in the second quarter as revenues improved and the cost of sales declined.

Dominion, which last year sold its Harry Winston luxury retail business, said consolidated net income attributable to shareholders in the most recent period was US$26.6 million or 31 per share, reversing a loss of US$13.9 million or 16 cents per share in the comparable 2013 period.

Revenue in the three months ended July 31 was US$277.3 million, up from US$261.8 million, while the cost of sales fell to US$221.2 million from US$231.1 million and gross margins improved to US$56.1 million or 20.2 per cent from US$30.7 million or 11.7 per cent.

"It is a pleasure to be able to report another quarter that exceeds expectations," chairman and CEO Robert Gannicott said in remarks accompanying the miner's earnings report.

"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 per cent interest in the Ekati mine and a 40 per cent minority stake in the Diavik mine in a joint venture with Rio Tinto.

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