Slump in diamond prices decimates Petra’s revenues

Petra-diamond-crop.jpg

Half-year sales at Petra Diamonds declined some $61m (£43m) versus the same period last year, the rough diamonds supplier and mining firm confirmed yesterday.

Petra posted sales of $154m (£109m) for the six months to the end of December, a 28% reverse year-on-year. Sales of exceptional diamonds fell 18% over the period as the company revealed it also made a net loss of $2.2m (£1.56m).

Bosses lamented a “weaker” diamond market for the six-month period, with pricing down 9% on a like-for-like basis in the first half, continuing a trend that has seen prices slump 20% over the last 18 months.

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Unrealised foreign exchange losses also hit the company hard, although it said this was mitigated by significant weakening of the South African Rand.

The company said it still recorded a profit margin from mining activities of 36% in the first half despite “challenging” market conditions.

CEO Johan Dippenaar put on a brave face, saying: “Operationally, the company performed well, with both production and our expansion programmes progressing according to plan and in line with our full-year targets.

“While our financial results have been impacted by the lower diamond prices achieved in comparison to the prior period, our operations maintained a healthy profit margin from mining activities of 36% due to the robust economics of our mines, as well as the favourable effect of the weaker ZAR on our cost base.”

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