Petra Posts Rise in Revenue in H1, Swings to Net Profit

(IDEX Online News) – Petra Diamonds Limited reported revenue up 19 percent to $185.5 million on a year earlier in the six months to December 31, 2013.

Profit from mining activity surged 115 percent to $73.4 million, while net profit after tax totaled $28.4 million from a net loss of $15.2 million a year earlier.

Production was up 31 percent to 1,635,716 carats and the firm said it remains on track to meet full year guidance of around 3.0 million carats for FY 2014.

Cash at bank at December 31 was $28.0 million from $38.2 million a year before and diamond inventories of around $49.4 million from $45.4 million a year earlier.

Loans and borrowings as of December 31 were $136.8 million compared with $124.2 million

“The market for rough diamonds has strengthened over recent months; Petra expects this firmer market to continue, with solid results expected from the group’s tenders in the second half of full year 2014.

“Longer term, a positive outlook for the diamond market is supported by the continued economic recovery in the US and growth in demand from emerging consumer markets.

“As per guidance, carat sales are expected to be significantly higher in H2 than in H1 due to the seasonal timing of Petra tenders (four tenders are held in H2, as opposed to three in H1) and the $25.6 million sale proceeds from the exceptional 29.62 carat Cullinan blue diamond sold on February 14.”

The miner said its first South African tender of H2 achieved $60.2 million from the sale of 432,187 carats. Including the proceeds of the 29.6-carat blue diamond, the company’s H2 revenue to date is $85.7 million.

Based on the company’s current operations and expansion plans, stated production growth, diamond prices and other relevant factors, “Petra expects to consider the commencement of dividend payments from FY 2016”.

Petra CEO Johan Dippenaar commented: “Petra’s growth plan to achieve annual production of 3 million carats in FY 2014 and 5 million carats by FY 2019 continues to progress well, with all expansion programs on track and on budget, and group capex entirely funded by operating cashflow for the first time during H1 FY 2014.

“We look forward to a strong second half, incorporating a continued firm rough diamond market, higher carat sales, and higher revenue and cashflows augmented by the sale proceeds of the 29.6 carat blue diamond from Cullinan.”