* Company sees growing demand for high-end jewelry
* UBS upgrades shares to “buy” rating from “neutral” (In U.S. dollars unless stated)
By Julie Gordon
TORONTO, Sept 2 (Reuters) - Shares in Harry Winston Diamond Corp HW.TO rose 15 percent at the market open on Thursday, after the diamond miner and retailer reported a higher than expected quarterly profit late on Wednesday and a 62 percent increase in sales.
UBS upgraded Harry Winston shares to a “buy” rating from “neutral” after the Canadian company reported a 14 percent increase in rough diamond production and an 89 percent increase in rough diamond sales in its second quarter. On the retail side, the company reported a 37 percent increase in sales.
Overall sales jumped up 63 percent to $153.7 million.
Harry Winston shares were at C$12.40, up C$1.65, at midmorning on the Toronto Stock Exchange after rising as high as C$12.58.
Chief Executive Frederic de Nap attributed much of the growth in demand to customers in the Middle East and China.
“The wealthy people of the world are growing,” he said on a conference call with analysts. “In this volatile world, people would rather spend a million dollars on a piece of jewelry for someone they love...over less secure investments.”
He added that the company expected to see continued growth in high-end jewelry and rough diamonds over the coming quarters.
Harry Winston plans to hold two rough diamond sales in the third quarter and three rough diamond sales in the fourth quarter, for a total of 10 rough diamond sales in its fiscal year.
The company also reiterated that it would continue to focus on mining Canadian diamonds.
In August, Harry Winston closed a $220 million deal to reinstate its 40 percent stake in the Diavik diamond mine in northern Canada by buying back the 9 percent interest in the mine it sold to Kinross Gold (K.TO) to bolster its balance sheets in the aftermath of the economic crisis.
$1=$1.05 Canadian Reporting by Julie Gordon; editing by Peter Galloway