Recovery could be Slow, says Petra, as Sales Slide
February 21, 24
(IDEX Online) - Petra saw sales slide by 10 per cent during the second half of 2023 amid ongoing uncertainty in the diamond market.
The UK-based miner said prices had now bottomed, but the recovery may be slower than first thought.
"Petra has reacted swiftly to diamond market uncertainty, taking steps to improve resilience through ongoing cost and capital optimisation," said CEO Richard Duffy.
"Whilst we believe that prices have now bottomed, we expect pricing to recover more slowly than initially thought.
Revenue for the six months to 31 December were $187.8m from the sale of 1.66m carats.
That's a 27 per cent increase in volume, although average price per carat fell by 29 per cent, from $159 to $113.
Petra reported a 13.3 per cent reduction in like-for-like prices and a lower-quality product mix.
It said it was working towards the sale of its loss-making Koffiefontein mine, in South Africa.
Unforseen underground mechanical issues at Finsch, South Africa, are likely to reduce FY 2024 production guidance to 2.75m cts to 2.85m cts, down form 2.9m cts to 3.2m cts.
Cullinan remained the most profitable of Petra's mines, based on adjusted profit from mining activities.
"Given the revised diamond pricing assumptions, we are focusing on improved business resilience," the company said in its interim results published yesterday (20 February).
"Work is ongoing to further optimise costs and future extension capital expenditure, the results of which will be presented at an Investor event later in 2024, along with details of the life-of-mine potential of Petra's assets."
Pic shows Finsch mine, courtesy Petra.