Petra raises H1 diamond output 2%, exceeding guidance

JOHANNESBURG (miningweekly.com) – Petra Diamonds lifted overall diamond production by 2% to 1.62-million carats for the six months ended December 31, exceeding its 1.5-million-carat production target for the first half of the year.

It remained on track to reach its production guidance of 3.3–million to 3.4-million carats for the full financial year and five-million carats for the 2019 financial year.

Revenue, meanwhile, slipped 28% to $154-million for the interim period, excluding exceptional diamonds, which raised revenue of $144-million – down 18% year-on-year.

Diamonds sold were down 7% for the period to 1.3-million carats, while sales were expected to recover to between 1.9-million and 2-million carats in the second half of the year, owing to the timing of tenders.

Rough diamond prices dropped 9% in the first six months on a like-for-like basis; however, the expected improvement in product mix had favourably impacted the average carat value achieved for each of the company’s operations. 

The cashflow impact of lower pricing on Petra’s financial results had been mitigated by the significant weakening of the rand over the period.

Capital expenditure reached $151.3-million over the period, including capitalised borrowing costs, in accordance with guidance and the roll-out of the group’s expansion programmes and largely on the back of the the costs associated with construction of the new Cullinan plant.

The company closed the year with net debt of $324.4-million, cash-at-bank of $41.6-million and debt facilities undrawn and available to the group of $177.1-million.

“We have made a good start to the year, with production ahead of our target for the first half of 2016, placing us in a good position to achieve full-year guidance.

“Importantly, our expansion programmes remain on track to deliver the first significant input of undiluted ore from the new mining areas in the second half of the year, which will lead to improved grades and a better product mix.

“Also, the construction of the new plant at Cullinan is on track and we look forward to the significant benefits this new plant will bring to bear at the mine,” commented CEO Johan Dippenaar.