Petra’s value-over-volume strategy paying off
The make-up of production at diamond miner Petra Diamonds is transforming, with higher-value run-of-mine (RoM) production having represented about 82% of the company’s carat volume during the quarter ended March 31.
This, the company said last week, was in line with the its focus on value rather than volume production.
Petra’s production increased by 20% to 1.19-million carats in the third quarter of the 2018 financial year, representing a record quarterly production performance for the group. RoM production for the quarter increased by 29% to 981201 ct.
Revenue for the quarter increased by 44% to $172-million from the sale of 1.37-million carats.
Rough diamond prices achieved during the two tenders in the third quarter increased 5% on a like-for-like basis, compared with the average for the first half of the 2018 financial year.
Meanwhile, shortly after the end of the period, net debt was reduced to about $622-million, which is in line with management expectations, following the receipt of sales proceeds from diamond debtors of $70.2- million.
Net debt as at March 31 was $685.9-million.
“Petra has recorded strong results in both production and sales, as well as a continued improvement in our safety performance,” said Petra CE Johan Dippenaar.
The future focus of the company will move away from volume targets to value optimisation, he added.
“While we are very encouraged by the operational delivery against our long-term expansion plans, risks to performance continue to relate to increased volatility in the rand:dollar exchange rate and grade and pricing variability at Cullinan, as well as the outlook for Williamson and the blocked [Williamson] diamond parcel.”
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