Petra Diamonds’ first-half revenue fell 6%, dented by lower prices as the diamond industry grappled with soft demand from China and Hong Kong, but the African miner said it would meet or exceed its annual production target.
The industry has been facing slowing demand due to anti-government protests in Hong Kong and the bruising trade dispute between China and the United States, while some analysts blame it on laboratory-grown diamonds.
There has, however, been an improvement in demand in the second quarter, with rough diamond pricing seeing a modest rise, the miner said, adding it is on track to meet or exceed its full-year production outlook of about 3.8 Mcts.
Revenue for the six months ended Dec. 31, came in at $193.9 million compared with $207.1 million last year, while production inched up 3% during the first half, the African diamond miner said.
Petra said lower prices and poor quality diamonds from the Finsch mine in South Africa offset the sale of the exceptional blue diamond from its flagship Cullinan mine.
The Cullinan mine, which was acquired by Petra in 2008, is the world’s main source of rare blue diamonds, accounted for around a third of the company’s diamond sales revenue in 2018. The company sold a 20.08 carat blue diamond recovered from Cullinan in September for $14.9 million.
Petra, which operates four mines – three in South Africa and one in Tanzania – said it produced about 2.1 million carats (Mcts) of diamonds, compared with 2 Mcts last year.
The diamond miner has invested heavily in the Cullinan mine in South Africa as it bets on big finds in an industry assailed by synthetic rivals and uncertain demand despite being saddled by debt.
Petra’s net debt stood at $596.4 million, at the end of December, from $592.8 million as of September-end.
(By Shanima A; Editing by Sherry Jacob-Phillips)