Diamond miner affected by work stoppages and variable grades of stone.
Petra Diamonds has released its unaudited trading update for the six months to December 31, with production up 31% and revenue up 54% to US$156.3 million (£99.1m), compared to H1 FY 2012.
The diamond mining company, which has operations in South Africa and Tanzania, outlined a 7% decrease in its expected full year production output, citing production difficulties and volatility in the recovered grades of stones. This follows a similar lowering of production guidance in August 2012.
Its target of five million carats per annum by 2019 “remains on track”, however. Petra will announce its interim results for the period on February 25.
Johan Dippenaar, chief executive of Petra Diamonds, said: “These results mark a further step change in production and revenues for the group. Though we consider it prudent to revise full year production expectations, it is important to note that we still expect to report substantial production growth for FY 2013. Our production growth plans remain in place, with targeted output growing to 5 million carats by FY 2019.”
Petra’s expansion programmes are said to be progressing well with capital expenditure of $92.1 million (£58.4m) in H2 2012, within management expectations and in accordance with the company’s growth expansion programs.
As of December 31 2012, its cash at bank totalled $38.8 million (£24.6m), with diamond inventories of $45.4 million (£28.7m).
Petra’s South African operations were affected by brief work stoppages during October 2012, although these disruptions were not as significant as those experienced in platinum sector. The company said that falling production levels as a result of these stoppages have now normalised and labour relations are stable.
Petra’s carat sales were lower than carats produced due to the seasonal timing of its tenders Petra held three tenders in H1 (equating to five months production) and will hold five tenders in H2 (equating to seven months production).
During 2012, a total of five stones exceeding US$1 million (£634,164) each were sold yielding US$8.0 million (£5.07m) in sales revenues. The highest value stones were both from Cullinan: a 68.6 carat white stone which sold for US$3.45 million, and a 39.9 carat rough stone which yielded a 13.2 carat high quality white polished stone, manufactured by Petra, and sold for US$1.48 million.