Weak demand takes shine off Petra Diamonds revenue
South Africa’s Petra Diamonds (LON:PDL) on Monday became the latest victim of weak demand for precious stones that is crippling the industry after reporting full-year revenue below analysts’ estimates.
The company, owner of the iconic Cullinan mine in South Africa, where the world’s biggest-ever diamond was found in 1905, also said it anticipated that next year’s production would be slightly lower.
It now expects to produce about 3.8 million carats in 2020, compared to the 3.9 million carats it generated for the year ended June 30.
Petra, which recently appointed former gold miner Richard Duffy as chief executive, has been seeking to turn around its fortunes after piling up debt to expand Cullinan. It said it was targeting $150 million to $200 million of free cash flow over the next three years.
Over the past year, diamond miners have had a hard time as demand remains weak, while supply, especially for smaller and cheaper stones, has increased.
Last week, the world’s biggest miner of precious stones, De Beers, also reported an output drop and cut guidance for the year.