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(Sharecast News) - Petra Diamonds updated the market on its production and trading for the first quarter ended 30 September on Monday, reporting a lost time injury frequency rate of 0.22 for the period, up slightly from 0.21 year-on-year.
The London-listed firm said it remained committed to achieving a "zero harm working environment".
Its production for the first quarter was ahead 1% at 1,082,764 carats, with the board saying it was on track to deliver guidance of around 3.8 million carats for the 2020 financial year.
First quarter revenue was down 23% to $61.6m, from 603,626 carats sold, which the company put down to lower diamond prices and volumes in comparison to the first quarter of 2019, compounded by a poorer product mix at Finsch, Williamson and Koffiefontein.
Diamond prices for the first quarter on a like-for-like basis decreased by around 4% year-on-year, although since the period ended, Petra said prices at its second tender indicated some stabilisation, with early signs of modest improvement towards the year-end.
As it had previously announced, a 20.08 carat Type IIb exceptional blue diamond was recovered at the Cullinan mine in September, and would be sold via special tender in Johannesburg in November.
Net debt as at 30 September totalled $592.8m (£456.57m), widening from $564.8m year-on-year, with the board putting the increase down to the single tender in the first quarter, taking into account an increase in diamond inventories valued at $92.4m at period end, compared to $57.5m a year earlier.
Its 'Project 2022' strategy was said to be progressing well, with implementation underway at Cullinan and Finsch, and diagnostics being completed at Koffiefontein and Williamson.
The benefits were expected to start being realised in the second half of the 2020 financial year.
On the forex front, Petra added that rand-dollar exchange rate weakness continued during the period, and provided favourable hedging opportunities to both benefit from the weaker rand and protect against possible future rand strength, partially offsetting the impact of weaker diamond prices.
"We have reported another quarter of solid operational performance putting us on track to achieve our full year production target of ca. 3.8 million carats," said chief executive officer Richard Duffy.
"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."
Duffy noted that the implementation of 'Project 2022' was now underway, targeting between $150m and $200m in free cash flow over the next three years.
"We are expecting benefits to be realised from H2 FY 2020 and will provide regular updates on our progress."
As at 1155 BST, shares in Petra Diamonds were down 1.98% at 7.92p.
30 Nov 2022 12:30
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