WINDHOEK, July 23, 2009 (AFP) - Leading Namibian diamond company Namdeb announced a 24-percent increase in net profit in 2008 due to higher sales in its financial report released Thursday 23 July, despite a slump in production.

Namdeb - www.namdeb.com

"Diamond sales at 5.65 billion Namibia dollars (735 million US dollars) is 24 percent higher than 2007," said Namdeb spokesman Hilifa Mbako, "when sales stood at 4.56 billion Namibia dollars."

Nameb, a joint venture between the Namibian government and diamond giant De Beers, announced financial results in the capital Windhoek via newspaper advertisements for the twelve-month period until December 2008.

The company said it produced around 2,122,000 carats last year, down from around 2,176,000 carats in 2007.

Net profit had nevertheless increased to 467 million Namibian dollars, from 143 million in 2007.

Namdeb said it had recovered more offshore diamonds from the Atlantic Ocean -- some 969,000 carats -- than from its onshore operation, which mined 844,000 carats.

"Over the first nine months of 2008 Namdeb achieved record sales as buoyant demand translated into increased prices," the company said, "fourth quarter sales slowed significantly as a result of the onset of the global economic downturn and the subsequent liquidity squeeze."

Net dividends to shareholders amounted to 51 million Namibian dollars, up from 12 million in 2007, according to the company's balance sheet.

But the company warned: "Namdeb expects trading conditions to remain challenging throughout 2009 as the global economic crisis has significant impact on sales of retail jewellery, liquidity and demand for rough diamonds in the cutting centres."

Namdeb halted production in April for three months to cut costs, with workers only returning at the start of July.

Namdeb's diamond mining licences expire in 2020.

Namibia's diamond industry is the sixth-largest in the world.

Diamonds were first found in Namibia a century ago, and the precious stones remain the main pillar of the economy.