28th Oct 2015 07:58
LONDON (Alliance News) - Petra Diamonds Ltd Wednesday said production reached record levels in the first quarter of the financial year and said the weakening of the South African rand is mitigating the steep fall in diamond prices.
The FTSE 250-listed diamond miner produced a "record" 842,796 carats in the first quarter ended September 30, compared to 833,744 carats a year earlier. That figure means the company is running ahead of its guidance for the first half of the year to produce 1.5 million carats.
Petra also reiterated its full year guidance to produce between 3.3 to 3.4 million carats, suggesting production will ramp-up in the second half. In the last financial year, Petra produced just under 3.2 million carats, meaning production is expected to be up for the full year.
Although production has reached record levels, the company did not book any revenue in the first quarter of 2015, compared to USD100.8 million a year earlier. Petra conducted its first tender for the current financial year in October, yielding proceeds of USD68.9 million.
Importantly, Petra said diamond prices have continued to fall, dropping a further 9.0% in dollar terms between the end of June and the end of September. However, the company said the weakening rand is mitigating lower dollar prices.
"Petra's focus remains on the maintenance of a healthy balance sheet, the tight control of costs, and the successful roll-out of our expansion plans, which will deliver the first significant input from the higher quality production areas from the second half of the 2016 financial year onwards. These measures will assist the company to withstand uncertain market conditions," said John Dippenaar, chief executive of the company.
By Joshua Warner; [email protected]; @JoshAlliance
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