Debmarine Nam weathers economic storm

Augetto Graig - Aboard Debmarine Namibia’s deep-sea diamond mining and exploration ships stormy waters don’t cause too much of a stir, with safety foremost at all waking hours, and preparation in anticipation of exploiting opportunity at the heart of the company culture.Loss time injuries dropped to 3 last year, from 9 in 2018.Debmarine Namibia is the leading diamond miner in the country and a ground-breaker when it comes to harvesting the glittering teardrops of the earth from under the turbulent oceans. In typical fashion the unique partnership between De Beers and the Namibian government has weathered the storms of 2019 bravely, and is on a course chartered to put it well ahead of the pack when clear skies return.With no major new major diamond mines on the global horizon, supply limitations are bound to play in favour of the bold Namibian men and women pioneering deep-sea mining.Their confidence is displayed by the N$7 billion investment made to build the Alternative Mining Vessel 3 (AMV3) which chief executive officer (CEO) Otto Shikongo expects to arrive in Namibian waters in the third quarter of next year, and to be in operation before the midway point in 2022.The AMV3 will add to Debmarine’s six ship mining fleet, and according to Shikongo, is a direct result of the foundation laid by their first-of-its-kind mv SS Nujoma exploration ship.Of the existing fleet, the Mafuta is the current MVP, recovering about 45% of total Debmarine Namibia diamonds, while the five drill ships make up the rest, he said.“The Mafuta went in-port for mandatory planned maintenance during 2019 and its impact was felt in our financial performance,” the CEO said. The ship undergoes planned maintenance every two and a half years.Matte productionChief financial officer Willy Mertens on Friday said Debmarine production for 2019 was 1.29 million carats, 10% less than 1.44 million mined in 2018.Revenue decreased 22% to N$7 billion from N$8,9 billion in 2018, “as a result of decreased production, consumer demand challenges and price, offset slightly by the weakening of the Namibia dollar against the US dollar impacting revenue positively”, he said.Despite all this, earnings before interest, taxes, depreciation and amortisation (EBITDA) of N$2.2 billion, at 31% operating profit as a percentage of revenue, “is still a good number in absolute terms”, he said.“In late 2018 stock market volatility and US-China trade tensions resulted in lower than expected holiday retail sales, which led to higher than anticipated stock levels in the industry’s midstream at the start of 2019,” he elaborated. “Following a period of mild growth through 2017 and 2018, the global diamond industry has struggled in 2019, mainly due to continued geopolitical instability,” he said. “We have seen a sharp decline in price during 2019,” he said. “We expect more uncertainty in 2020,” he added.Boosting coffersCapital expenditure increased 65% to N$1.4 billion, driven by the AMV3 investment, he said. “We expect capital expenditure to peak in 2020 and 2021 as we progress with the AMV3 project, hence the lower dividend payments,” he said.Dividends drop 57% to N$300 million, compared to N$700 million in 2018. Royalties and taxes paid to government also dropped 20% to N$1.9 billion for 2019, from N$2.4 billion the year before.Nonetheless Debmarine calculates that it added N$10.2 billion value to the Namibian economy last year, paying suppliers N$3.9 billion, employees N$882 million, N$471 million for debt, N$300 million for equity, N$1.4 billion for reinvestment, government’s N$1.9 billion and retaining N$1.3 billion for contingencies.According to Mertens, Debmarine’s direct contribution to Namibia in the six years to 2019 was N$19.3 billion.augetto@republikein.com.na

Debmarine Nam weathers economic storm

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Republikein 2025-05-01

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