Falling Rough Prices Hit Petra Revenue in First Half

Revenue at Petra Diamonds dropped in the first fiscal half in response to sluggish demand and a slump in the average price for rough diamonds.

Sales slipped 10% year on year to $187.8 million for the six months that ended December 31, the company said Tuesday. A 27% rise in sales volume to 1.7 million carats was outweighed by a 29% decline in the average price to $113 per carat. During the period, like-for-like prices — compared with similar categories of diamonds — slid 13%. The miner also offered a lower-quality product mix, it explained.

Petra reported a net loss of $11.3 million for the first half, an improvement from its $17.6 million loss a year ago. The loss was attributable in part to an impairment charge at the Williamson mine in Tanzania as well as fees for the settlement of human-rights abuse claims. Additionally, Petra paid an impairment charge relating to the disposal of Sekaka Diamonds to Botswana Diamonds.

The miner slashed its guidance for the full year due to underground mechanical issues at the Finsch mine in South Africa. Petra expects output of 2.75 million to 2.85 million carats for the year, compared to its previous outlook of 2.9 million to 3.2 million carats. Production for the first six months increased 2% to 1.4 million carats.

Meanwhile, the company’s net debt increased to $212.4 million as of December 31 from $176.8 million on June 20.

The miner is also working on tracking all of its rough to provide verifiable origin for its goods, it noted.

“Petra has reacted swiftly to diamond-market uncertainty, taking steps to improve resilience through ongoing cost and capital optimization,” said Petra CEO Richard Duffy. “Whilst we believe that prices have now bottomed, we expect pricing to recover more slowly than initially thought. We continue to see a supportive market in the medium to longer term…. We have also commenced trials to further support the traceability of our product. We believe that offering verifiable origin and provenance has potential to significantly enhance the purchase experience, highlighting the inherent rarity and uniqueness of natural diamonds to consumers.”

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Main image: Ore being processed on the production belt. (Petra Diamonds)