Petra Diamonds experiences a drop in Rough Prices, faces a loss of $2M
Petra Diamonds experiences a loss of $2.2 million in its first half that ended on December 31 while on the contrary a year earlier the company enjoyed a profit of $39.1 million. The miner functions the underground mines in South Africa such as Cullinan, Koffiefontein, Finsch and Kimberley. It aside from Kimberley Mines too acquires the South Africa’s Ekapa Mining from De Beers
Petra Diamonds faces a loss of $2.2 million in the first half of the company that ended on December 31st the year closed. Further, the company that enjoys the profit of $39.1 million a year earlier now experiences the fall due to the drop in the rough prices. The chief executive officer of the Petra Diamond, Johan Dippenaar in the presentation to investors held on February 22 stated that the prices achieved by the miners fall about 20% over the last 18 months. A statement reported by the company’s officials clearly shows that the average bid prices on three of its four mines of South Africa were lower in the final six months of the year 2016 compared with the twelve months to June 30. Prices at the Williamson mine south of Mwanza in Tanzania improved if rare diamonds are considered into account, but declined without them. Dippenaar too mentions that their financial results have been impacted by the diamond prices achieved in comparison to the previous period. Furthermore, the company’s operations maintained a tidy net income margin from mining activities of 36% due to the robust economics of their mines and the favorable effect of the weaker Rand on the company’s cost base. Revenue fell 28% Y-O-Y to $154 million, but the production increased 2% to 1.6 M carats. Petra forecasts that the production would go up from 3.2M Cts. in the last fiscal year to between 3.3 and 3.4M Cts. in the year that will end on June 30, 2016. The production guidance shows 5 million carats for fiscal 2019.