Petra Diamonds has announced a decline in rough diamond prices during its latest tender, reflecting ongoing market softness. The company combined its delayed September and October tenders, generating $76 million from the sale of 600,161 carats.
While the average price per carat increased by 13% to $126, this rise does not indicate a market rebound. Instead, it was attributed to a better product mix. On a like-for-like basis, prices fell by 9%, and the total revenue from the two tenders was down 42% compared to $131 million from the same period last year.
CEO Richard Duffy highlighted that the continued weakness in the rough-diamond market is evident in the results. Notably, an 18.85-carat blue diamond sold for $8.5 million contributed significantly to the average price increase. Additionally, a 405-carat diamond of “exceptional clarity” fetched $4.7 million. However, the company withdrew a parcel of 88,000 carats of lower-value brown diamonds due to weak demand.
Revenue for the first fiscal quarter, ending September 30, dropped 77% year-over-year to $23 million, primarily from the blue diamond sale and $14 million from the Williamson mine in Tanzania. To manage lower sales, Petra drew $48 million from its revolving credit facility, planning to repay this once total proceeds from the tenders are finalized. The company’s debt rose to $285 million by the end of September, up from $201 million on June 30.
Sales volume fell sharply by 91% to 85,449 carats, mainly due to the deferral of goods from the first tender. In August, Petra announced it would postpone much of the rough from its Cullinan and Finsch mines to the current tender to improve prices.
Total output for the quarter decreased by 2% year-on-year to 679,625 carats. However, it was a 7% increase from the previous quarter, driven by higher-grade ore from the Cullinan mine and increased tonnage from Williamson.
Despite the current market challenges, Petra remains optimistic about a potential rebound in rough prices. Duffy stated, “We continue to expect prices to show some improvement in 2025, with market fundamentals being supportive in the medium to longer term.”
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