Petra Diamonds experienced a decline in revenue during the first half of the fiscal year due to subdued demand and a decrease in the average price of rough diamonds. The company announced on Tuesday that sales fell by 10% year-on-year to $187.8 million for the six-month period ending December 31. While sales volume increased by 27% to 1.7 million carats, this was offset by a 29% drop in the average price to $113 per carat. During this period, like-for-like prices for similar diamond categories also decreased by 13%, exacerbated by a shift towards lower-quality product offerings.
Petra reported a net loss of $11.3 million for the first half, an improvement from the $17.6 million loss recorded in the previous year. This loss was partly attributed to an impairment charge at the Williamson mine in Tanzania, as well as fees related to the settlement of human-rights abuse claims. Additionally, Petra incurred an impairment charge associated with the disposal of Sekaka Diamonds to Botswana Diamonds.
Due to underground mechanical issues at the Finsch mine in South Africa, Petra revised its guidance for the full year, expecting output to range between 2.75 million and 2.85 million carats, down from the previous outlook of 2.9 million to 3.2 million carats. Production for the first six months saw a modest increase of 2% to 1.4 million carats.
Meanwhile, the company's net debt rose to $212.4 million as of December 31, up from $176.8 million on June 30. Petra also highlighted its efforts to implement traceability measures for all its rough diamonds to provide verifiable origin information for its products.
"Petra has responded swiftly to the uncertainties in the diamond market, implementing measures to enhance resilience through ongoing cost and capital optimization," said Petra CEO Richard Duffy. "While we believe that diamond prices have reached a bottom, we anticipate a slower recovery in pricing than initially anticipated. Nevertheless, we remain optimistic about the medium to long-term outlook for the market... We have also initiated trials to further enhance the traceability of our products. We believe that offering verifiable origin and provenance has the potential to significantly enhance the consumer purchasing experience, emphasizing the inherent rarity and uniqueness of natural diamonds."
