Harry Winston posts loss; diamond sales plunge

TORONTO (Reuters) - Harry Winston Diamond Corp (HW.TO: Quote) posted a quarterly loss on Thursday due to falling global diamond demand and a series of one-time items.

The Canadian company, which owns the Harry Winston diamond retail chain as well as just over 30 percent of the Diavik diamond mine in Canada's Arctic, lost $45.1 million, or 68 cents a share, in the first quarter ended April 30.

That compares with a year-earlier profit of $21.3 million, or 35 cents a share.

The latest results include the impact of a noncash dilution loss from Kinross Gold Corp's investment in the partnership that holds the diamond mine stake, as well as a net foreign exchange loss and an after-tax gain on an insurance settlement.

Excluding those special items, the loss was 10 cents a share.

Quarterly sales fell almost 30 percent to $109.6 million, as sales of rough diamonds effectively stalled in the quarter.

Rough diamond prices fell to levels not seen since the inception of the Diavik Project seven years ago, the company said.

Diavik is 60 percent owned by Australian miner Rio Tinto (RIO.L: Quote). Kinross Gold (K.TO: Quote) bought a direct 9 percent stake in the mine earlier this year and also purchased 20 percent of Harry Winston.

In March, Harry Winston said it would defer construction of the underground portion of Diavik and extend seasonal shutdowns of the active open pit mine due to challenging global market conditions.

(Reporting by Euan Rocha and Cam French; Editing by Lisa Von Ahn)