Petra Diamonds gives mixed Q1 update

12th Nov 2013 09:36

- Q1 production jumps 25 per cent- Weaker diamond price in post-summer period- Current labour situation is stablePetra Diamonds, the FTSE 250 miner, reported a 25 per cent year-on-year leap in first quarter production to 816,735 carats, despite challenging labour conditions in South Africa and associated work stoppages.However, investors were more concerned with a the weaker diamond price performance in the post-summer period, which saw the average prices achieved at Petra's first quarter tender around 7% below those achieved in Petra's second half. Petra said this affected revenue growth, which for the period was up 27% to $65.1m year-on-year, driven by increased sales volumes. The group also disappointed with reports of decreased production at Helam, Williamson, Koffiefontein, and Cullinan. Finsch, as the only South African operation unaffected by the industrial action in the first quarter, increased carat production by 61% to 517,667 carats (Q1 2013: 320,614 carats). Kimberley Underground's throughput was adversely affected by the strike action, but production was still up 5% on the comparative period to 27,523 carats. The group said the labour situation at Petra's South African operations has remained stable since the end of the industrial action. Johan Dippenaar, Petra's Chief Executive Officer, said: "These results demonstrate the continued delivery of growth in accordance with our stated expansion plans. Having a well-diversified portfolio is important in terms of our ability to manage production risk across the group and this, combined with the quality and tenacity of our team, places us in a strong position to meet our targets. "Our mines produce a significant and growing volume of the commercial, mass market goods which form the mainstay of the diamond market, but they also regularly produce high quality, and at times world-class, diamonds. "We are delighted to have recovered a range of such special stones in our second quarter, including two exceptional white Cullinan diamonds, which we expect to generate substantial interest at our next sales tender in late November."NR