Petra Diamonds’ shares fell 11% in early trading Monday after the miner reported a slide in revenue resulting from weak rough prices.
Revenue fell 6% to $193.9 million in the first fiscal half ending December 31, while sales volume was stable at 1.7 million carats, Petra said Monday.
Rough prices fell 10% due to the weak market, while a poorer product mix from Petra’s Finsch mine in South Africa and Williamson mine in Tanzania also impacted sales, it said. The average price at Finsch fell 25% to $79 per carat, and at Williamson it slid 17% to $184 per carat.
Those challenges outweighed the $14.9 million in revenue Petra received for the sale of a 20.08-carat, blue, type IIb diamond from its Cullinan deposit, the miner explained.
Production rose 3% to 2.1 million carats, despite disruptions to mining in December as the local electricity company forced Petra to halt operations at its South African projects. The company expects to meet or exceed its guidance of 3.8 million carats for the full fiscal year ending June 30, it said. However, Petra warned further power cuts could impact that production.
The company’s net debt increased to $596.4 million as of December 31, compared to $592.8 million on September 30.
Prices of rough diamonds stabilized toward the end of December, with demand improving as the midstream began to replenish inventory, Petra noted.
Image: Ore on a conveyor belt at the Finsch mine. (Petra Diamonds)