18th Sep 2015 06:32
LONDON (Alliance News) - A weaker diamond market and a reliance on mature mining areas caused Petra Diamonds Ltd to post a decline in full-year profit on Friday, as the group's revenue fell despite its production edging higher in line with its guidance.
FTSE 250-listed Petra said its pretax profit for the year to the end of June was USD85.0 million, compared to a USD124.4 million profit a year earlier, as its revenue declined 10% to USD425.0 million from USD471.8 million. The group said it will pay a dividend for the year of 3.0 cents per share, its maiden payout.
Petra said is results were hit by its underground production being heavily reliant on mature, diluted mining areas and by a weak diamond market over the year, though this was partially offset by a beneficial impact of the depreciation of the South African rand.
Production for Petra was up 2.0% in the year to 3.2 million carats, in line with its guidance, and it expects its production in the 2016 financial year to edge higher again, up to 3.3-3.4 million carats. It also expects undiluted ore from its new mining areas to make contribution to its profit from the second half of the 2016 financial year and said it has made a solid start to the year from a production perspective.
It added it remains on track to hit its production targets out to 2019 and expects its results for the 2016 financial year to be helped by the weak rand.
"As already reported, full year 2015 was a challenging period, both operationally, due to the reliance of our underground mines on the mature, diluted mining areas, and also in terms of the softer diamond market, which saw lower pricing for the year," said Chief Exeuctive Johan Dippenaar.
"While market conditions remain subdued in the short term, Petra is in a robust position given our strong balance sheet, efficient cost base and increasing operating margin profile as we start to access the new, undiluted mining areas at Finsch and Cullinan from full year 2016 onwards," he added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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