Petra Diamonds books $10m loss as prices decline
Petra Diamonds fell to a loss in the first half of the year after increasing production at the miner was offset by a decline in diamond prices.
Shares in the firm fell over nine per cent in early trading.
The figures
The company booked a $10m loss in the six months to December, a swing from a $57.9m profit the year before.
Revenue declined six per cent to $193.9m, largely due to falling prices, down from $207.1m in 2018.
Earning before tax fell 11 per cent to $67.2m, while free cash flow was $13.7m, down from $18.5m the previous year.
Petra reported a basic loss per share of $1.01.
Why it’s interesting
The FTSE-listed firm, which operates mines in South Africa and Tanzania, said it was on track to exceed its full-year production guidance but was hampered by a “slower start” at its world-famous Cullinan mine in South Africa. The firm, whose financial year comes to an end in June, says production will be weighted towards Q4.
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The numbers will be a disappointment for investors, who may have been expecting to see an improved performance after rivals De Beers and Gem Diamonds posted impressive results in recent weeks.
November’s sale of a 20 carat blue diamond found at South Africa’s famous Cullinan mine for $14.9m (£11.49m) was a bright spot in a slow half for the firm.
Despite being equivalent to about $741,000 per carat, the sale was not enough to offset lower prices from other goods.
In addition, Petra said that project 2022, its attempt to deliver $150-200m in free cash flow from 2019 to 2022, was being hampered by a weaker market, partly due to the outbreak of coronavirus.
What Petra said
Chief executive Richard Duffy said: “Petra has delivered a strong operational performance in the first half and we remain on track to achieve production guidance for the full year of 3.8m carats.
“Our priority now is to continue to drive operational improvements to optimise production and free cash flow, with the aim of reducing leverage levels against the backdrop of a challenging diamond market.”