Petra H1 production stable, profit plunges on lower price

JOHANNESBURG (miningweekly.com) – Diamond mining group Petra Diamonds has fallen into the red during the first half of the year as lower diamond prices take hold.

The London-listed group posted a loss of $2.2-million for the six months to December 31, a turnaround on the profit of $39.1-million posted during the corresponding period the year before.

A basic loss a share of $0.72 was reported in the first half, compared with a basic earnings a share of $0.06c.

Revenue for the six months under review declined 28% to $154-million, while carats sold during the period under review declined 7% to 1.3-million carats.

During the six months under review, pricing was down 9% on a like-for-like basis and 20% down over the last 18 months; however, the impact on Petra was mitigated somewhat by the weakening of the rand and a continued focus on efficiencies and cost control, said CEO Johan Dippenaar.

Post period-end, however, some stability had been seen in diamond market conditions with firm prices achieved at the first tender of the second half.

“While our financial results have been impacted by the lower diamond prices achieved in comparison to the prior period, our operations maintained a healthy profit margin from mining activities of 36% owing to the robust economics of our mines, as well as the favourable effect of the weaker rand on our cost base,” he said.

Petra exceeded its first-half output target of 1.5-million carats, with a 2% increase in production to 1.6-million carats, leaving the diamond miner firmly on track to meet its full-year guidance of 3.3-million to 3.4-million carats.