Petra warns of volatility in diamond price

City A.M. Reporter
PETRA Diamonds expects rough diamond prices to remain volatile for the remainder of this year as a result of recent economic uncertainty, the Africa-focused miner said as it posted a 5.4 per cent fall in core full-year profit.

Earnings before interest tax depreciation and amortisation dipped to $67.1m (£42.6m) missing the consensus of $74.5m, for the year to end-June.

Lower production outweighed higher rough diamond prices that had risen steadily from last October to highs in June. It already announced that revenue rose 24 per cent in the year.

Petra’s shares closed up one per cent at 125.50p yesterday.

It completed the acquisition of a 74-per cent interest in the Finsch mine, South Africa’s second-largest mine by output, last week. The mine is expected to add at least 1m carats to production for the current financial year.

“We expect to see some growth on the current portfolio,” chief executive Johan Dippenaar said yesterday adding that Petra expects to produce 2.1m to 2.3m carats overall in the current financial year, up from 1.12m in 2011.

Petra, which has seven producing mines in South Africa and one in Tanzania, expects to produce about 4m carats by 2014 and more than 5m carats a year by 2019.

The company’s main drivers are the Cullinan, home to the largest gem ever found, and Finsch mines.