Revenue and production up at Petra Diamonds

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European jewellery demand shows ?modest growth? in Christmas sales.

Petra Diamonds enjoyed a strong six months to December 31 with production up 61% and revenue up 13%.

The diamond company said that sales of jewellery registered modest growth in Europe and the US in the run-up to Christmas, but demand was much higher from emerging markets China and India.

Petra said that it believes the diamond market stabilised in December and expects this trend to continue throughout 2012. This belief is fuelled by string interest in the company’s first tender of the year, which is currently under way, and anecdotal evidence it has received from its client base with regards to global demand for rough stones.

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Despite these assurances Petra went on to warn investors that it expects that there could be some volatility in rough diamond pricing in the short term as global economic conditions play havoc with the market. It added: “It should be noted that demand from Asia and other emerging markets is continuing to grow strongly and is lessening the reliance on the major US market. The long-term fundamentals of the industry are compelling; whilst supply is forecast to remain flat or may decline, demand for diamonds is expected to continue to rise in both established and new markets as wealth and consumer spending increase.”

Petra Diamonds chief executive Johan Dippenaar added: “Revenue growth was affected by the weakening in rough diamond prices since July 2011, but the long-term outlook for the rough diamond market remains positive due to the growth in demand from emerging markets set against a flat or declining supply trend.”

During the period Petra Diamonds made a successful step-up from AIM to the Main Market of the London Stock Exchange and expects to enter the FTSE 250 index in March.

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