Petra Revenue Slips Amid Shortage of Special Stones

Revenue at Petra Diamonds declined in the first fiscal half as a result of lower sales volume and a lack of large and colored stones.

Sales dipped 20% year on year to $212.1 million for the six months ending December 31, while sales volume fell 18% to 1.3 million carats, the company said Tuesday. It did not sell any exceptional stones — a category that brought in $77.9 million for the same period a year earlier. An improved product mix as well as a 12.6% increase in like-for-like rough-diamond prices helped offset the drop, the miner explained.

Petra reported a net loss of $17.6 million for the first half, versus a profit of $49.1 million a year ago. The loss was attributable in part to an impairment charge of $3.8 million as well as additional costs connected to a wall breach at a tailings storage facility at the company’s Williamson mine in Tanzania. An operating loss of $8.7 million at the Koffiefontein deposit in South Africa also dented group profit. The miner has placed the site on care and maintenance, it announced last month.

Production slipped 21% to 1.4 million carats as Petra reduced the amount it processed from its Finsch deposit and mined lower-grade ore from Cullinan, both located in South Africa.

Meanwhile, the company’s net debt more than doubled to $90.2 million as of December 31 from $40.6 million on June 30. It currently has $12.5 million in rough inventory, while it had $79.6 million a year ago.

Petra expects to recover 2.75 million to 2.85 million carats for the whole fiscal year, it added. It also anticipates improvements to Finsch and Cullinan will lead to production of 3 million to 3.3 million carats in fiscal 2024, and between 3.6 million and 3.9 million carats in fiscal 2025.

“Both the Finsch and Cullinan mines have a significant resource base, giving them potential for long lives, and our projects at both mines continue to progress in line with expectations,” said Petra CEO Richard Duffy. “Production will be further boosted from the recently approved C-Cut extension at the Cullinan mine, set to deliver a total of 2.3 million additional carats from fiscal year 2025 through to fiscal year 2033.”

Image: The Finsch mine in South Africa. (Petra Diamonds)