South Africa’s Petra Diamonds (LON:PDL) increased sales by more than a fifth in the first quarter of its financial year, as higher production, better quality stones and a weakening of the rand offset a slump in the price of the precious rocks it mines.
Revenue rose 22 percent in the quarter to $80.2 million from $65.8 million a year prior, despite diamond prices being 5 percent lower when compared to the same period of 2017.
Diamond production increased 21 percent to 1.1 million carats from 883,803 carats the year prior. The improvement was mainly due to a 25 percent run-of-mine production jump across its operations to 1 million from 815,571 carats.
The superior performance marks a turnaround for Petra, which hasn’t been an investor’s favourite this year. In May, in fact, it had to raise £133 million via a discounted share sale and last month its chief executive John Dippenaar announced he was leaving the company.
Petra, which owns the iconic Cullinan mine, where the world’s biggest-ever diamond was found in 1905, said net debt also rose in the three months to September— 3.5 percent to $538.9 million from $520.7 million three months earlier, in line with its expectations.
The company, which expects to be cash flow positive for financial 2019, said is still in discussions with Tanzania, where the government seized last year a diamond parcel from it Williamson mine of about 71,000 carats.
The move, part of the country’s ongoing probe into alleged wrongdoing in the diamond and tanzanite sectors, has been costly for Petra, as it shares lost around half of their value last year after the incident.
Shares in Petra have lost 24 percent of their value so far this year and were last trading at 38.5p.