In its unaudited trading update for the six months ended 31 December 2016 (H1 FY 2017), Petra Diamonds Limited reported that its revenue increased to US$ 228.5 million from US$ 154.0 million generated for  H1 FY 2016, marking a growth of 48% “due to increased sales volumes”.

The Company noted that excluding Exceptional Diamonds, its  revenue of US$ 217.6 million,  represented a 51% increase over H1 FY 2016 which amounted to US$ 144.0 million.

In H1 FY 2017, Petra sold 1,910,113 carats of diamonds compared to  1,303,051 carats sold in H1 FY 2016; marking a rise of  47%.

“H2 is expected to be a stronger sales period, due to the timing of tenders being weighted towards the latter half of Petra's financial year,” Petra said. The Company held   three tenders in H1 and will hold four tenders in H2. The Company remarked that rough diamond prices for comparable goods had remained flat y-o-y. However, the Company pointed out that “some weakness was observed in the smaller, lower value size categories during Petra's December tender, following the Indian government's (demonetisation) actions....”

The Company  held a diamond inventory of  673,031 carats valued at US$ 50.8 million as at  December 31, 2016; inventory on  December 31, 2015had stood at  666,357 carats valued at US$ 57.4 million.

Petras’s production for H1 FY 2017 rose 24% to 2,015,087 carats  as compared to  1,629,403 carats  recovered in the same period of the previous year. This, the Company explained was “due to increased contribution from undiluted ROM ore leading to improved ROM grades, and additional tailings production from Kimberley Ekapa Mining”.

 Johan Dippenaar, Chief Executive Officer, commented: "Due to the increased contribution in H1 FY 2017 from undiluted ore, we have delivered strong operational results, reporting significant increases in production and revenue. We continue to advance our expansion programmes and, from this point onwards, will see a meaningful reduction in Capex as the capital projects, which were first set out in 2009, come to fruition.”

Touching upon developments on the operational front, Petra indicated that  it “remains on track” to deliver full year production of ca. 4.4 - 4.6 Mcts; also on track are underground expansion projects with Finsch's Block 5 SLC and Cullinan's C-Cut Phase 1 delivering initial production during the period as evidenced by the improving ROM grade profiles; and that commissioning of the new Cullinan Plant will  commence towards the end of Q3 FY 2017.

Petra noted that retail demand is improving, with jewellers either  reporting slight growth or a  decrease in the decline. 

Commenting of the current market scenario Petra said: “Signs of stabilisation in the rough diamond market are evident with steady demand across the majority of size ranges, except in the smaller, lower value categories which have been experiencing some pressure due to the Indian government's demonetisation of high value banknotes and the subsequent impact of smaller midstream players on liquidity in the Indian diamond market. Petra expects market conditions to remain stable in H2 FY 2017 (January to June 2017).”

The  Company's Interim Results for the H1 FT 2017 will be announced on 20 February 2017.