Petra points to positive outlook

Diamond producer Petra Diamonds on Tuesday underlined an increasingly positive outlook for the diamond market as evidenced by the significant strengthening of diamond prices.

Petra reported a 24% increase in gross mine revenue to US$220.6 million for the year ended in June, mainly due to the steady increase in rough diamond prices from October last year. Revenue of US$90.0 million in the first half rose to US$130.6 million in the second half.

Gross carats sold were up 4% to 1,174,825 and gross production was down 4% to 1,116,965 carats.

Petra's CEO Johan Dippenaar said: "The outlook for the diamond market looks positive."

The group reached an agreement with De Beers in January to acquire the Finsch mine in SA, and according to Dippenaar, Petra expected to complete the purchase in the "coming weeks". Finsch would more than double Petra's annual carat production and increase the group resource base to over 300 million carats valued at circa US$56.5 billion rand.

He said that the growth profile remained firmly on tracks to deliver five million carats by 2019.

"With the closure of the Finsch acquisition expected in the coming weeks, the company remains on track to more than double production in the 2012 financial year, and is targeting four million carats in the 2014 financial year and over five million carats by 2019."

The chief executive said that the group's intended move from AIM (Alternative Investment Market) to the London Stock Exchange's Main Market by the end of the calendar year was on track, certainly before December.

In remarking on the results, Dippenaar said: "Petra has once again recorded significant growth in revenue, reflecting the health of the rough diamond market. Whilst production was relatively flat for the Period, we will see a further step-change in output for the 2012 financial year as the Finsch acquisition is expected to complete shortly.

Given the outlook for the diamond industry, where demand is forecast by most industry commentators and major producers to outpace supply, Petra's exceptional growth profile will ensure the group is in a strong position to capitalise on these very robust fundamentals," he said.