Announcing its trading update (unaudited) for  the period from  July 1, 2019 to  October 18,  2019, covering production and sales from  July 1, 2019 to  September  30, 2019 (Q1 FY 2020), Petra Diamonds Limited reported that production for the period was up 1% to 1,082,764 carats as  compared to a production of 1,068,140 carats in Q1 FY 2019. The Company said it was on track to deliver on its guidance of about 3.8 Mcts for FY 2020.

Q1 revenue, however, decreased by 23% to US$61.6 million (from 603,626 carats sold -- lower by 4% y-o-y) as compared to US$80.2 million earned from 626,541 carats sold in Q1 FY 2019. This, Petra said was “due to lower diamond prices and volumes in comparison to Q1 FY 2019, compounded by a poorer product mix at Finsch, Williamson and Koffiefontein”.

The Company noted that diamond prices for Q1 FY 2020 on a like-for-like basis decreased around 4% in comparison to Q4 FY 2019. “Post Quarter end, prices at our second tender indicate some stabilisation with early signs of modest improvement towards year end,” Petra added.

The   20.08 carat Type IIb exceptional blue diamond which was recovered at the Cullinan mine in September,   will be sold via special tender in Johannesburg in November 2019, the Company re-iterated.

Petra’s net debt as at September 30, 2019 stood at US$592.8 million; which, on  June 30, was US$564.8 million.  The increase in net debt is due to only one tender being held in Q1 “and takes into account an increase in diamond inventories, valued at US$92.4 million at Period end (30 June 2019: US$57.5 million)”, the Company explained.

Richard Duffy, Chief Executive of Petra Diamonds, commented: "We have reported another quarter of solid operational performance putting us on track to achieve our full year production target of ca. 3.8 Mcts. The diamond market remains challenging, however we will benefit from the sale of the exceptional 20.08 carat Type II blue diamond from Cullinan recovered at the end of the quarter. The implementation of Project 2022 is now under way, targeting US$150 - 200 million free cashflow over the next three years. We are expecting benefits to be realised from H2 FY 2020 and will provide regular updates on our progress."