Petra Diamonds profits up

London-listed Petra Diamonds on Monday reported earnings per share of 12.83 US cents for the year ended June 2011 from 22.65 cents a year ago, after the issue of 136.7 million new shares in January 2011.

The diamond miner reported revenue rose to US$220.6 million from US$163.7 million, while profit from mining activity rose to US$76.4 million from US$67.2 million.

EBITDA amounted to US$67.1 million from US$70.9 million (which included a profit of around US$35 million due to the sale of the 507 carat Cullinan Heritage diamond.) Profit after tax declined to US$59.2 million from US$70.2 million

Production of 1,117,795 carats was lower than the 1,164,856 carats produced in 2010 due to Petra's strategic focus on 'value production', the planned cessation of main pit production at Williamson, the planned depletion of Optical Sort Plant tailings material at Cullinan, initial commissioning difficulties at Kimberley Underground and unseasonably heavy rainfall in South Africa, it said.

The company said expansion plans on target to increase production to around 4 million carats (Mcts) by FY 2014 and to over 5 Mcts by FY 2019.

It noted that diamond prices rose steadily from October 2010 to highs in June 2011.

Petra has acquired the world-class Finsch mine from De Beers for R1.425 billion, with the deal completed post period-end on 14 September. After an initial three month bedding down period, Finsch is expected to add 125,000 carats per month to Petra's output, adding at least 1 Mcts for FY 2012

Petra Diamonds CEO Johan Dippenaar said over the last year, Petra further consolidated its position as one of the world's largest quoted diamond mining groups.

“We have a high quality portfolio of production assets and expansion plans underway which will drive our exceptional growth profile. The fundamentals of our industry are strong; whilst the global supply of diamonds remains constrained, demand continues to rise in both established and new markets.

“With the completion of Finsch and the proposed move up to the Main Market of the London Stock Exchange, I am very positive about the future for Petra in the 2012 financial year and beyond,” he said.

The LSE Main Market step-up is expected by the end of December.

“Although recent economic uncertainty has led to an adjustment in rough diamond prices since Period-end, the long-term outlook remains positive due to strong supply and demand fundamentals,” the group said.