Petra Diamonds yesterday said there has been “continued softness in demand for stones between 1 and 10 carats”, worsened by seasonal weakness in diamond prices.
This comes after the company last month said it was extending the life of its South African mines after scaling back operating costs by $30 million (R550m) from 2025 onwards.
Apart from operating Cullinan and Finsch mines in South Africa, Petra Diamonds also runs the Williamson mine in Tanzania.
Under its latest diamond auction for the month of June, 2024 Petra Diamonds earned $37m, it said yesterday.
This brought up the company’s revenue for its 2024 full-year trading period to $366m which is higher by about 13% compared to the 2023 full year.
Petra Diamonds CEO Richard Duffy yesterday said he now expected “a subdued market” for the remainder of the year.
“We expect a subdued market through to the end of this calendar year. Like-for-like prices in this tender cycle were down 3.8% compared to Tender 6 as a result of the continued softness in demand for coarser goods, specifically stones between 1 and 10 carats in size, exacerbated by seasonal weakness,” said Duffy.
He also said “like-for-like rough diamond prices decreased by 3.8%” compared to its tender in May “on the back of continued softness in demand for coarser goods, most notably in the 1 to 10ct size” ranges.
“Average like-for-like prices for FY 2024 were down 12.4% compared to prices achieved in FY 2023. The balance of price movements is attributable to product-mix, with overall average prices per carat received being 6% lower than the previous tender,” the company said.
Moreover, and in line with its two previous tenders, prices realised for stones from the Williamson mine in Tanzania remained low due to a reduced prevalence of higher-value single stones.
Petra Diamonds has ascribed the reduced prevalence “to the mining areas currently being accessed but it is expected to be temporary” in nature.
Nonetheless, in addition to Petra Diamonds’s rough diamond sales under the latest tender, the company also benefited from the sale of three partnership stones. This helped raise the profitability profile of the company though its level for the 2024 year remained under last year’s profit.
For its 2024 full year, Petra Diamonds’s profits totalled $1.3m – slightly down compared to the 2023 full-year profit of $1.4m.
In June, Petra Diamonds received average prices of $111 per carat compared to $118 per carat attained last month. It also sold 9% lesser carats in diamonds at about 337 000 carats compared to its sales volumes for May, 2024.
“Total revenue from rough diamond sales for FY 2024 is $366 million, compared to $324 million in FY 2023, excluding Koffiefontein. Year-on-year volume variances were affected by the deferral of certain parcels from FY 2023,” the company said.
Petra Diamonds said last month it had struck a long-term deal for the supply of renewable energy to its South African diamond mines as it seeks to secure sustainable power supply for its operations.
BUSINESS REPORT