Petra Diamonds full-year revenues drop 36%, COVID-19 weighs

PUBLISHED: Thu, 23 Jul 2020 13:08:49 GMT

JOHANNESBURG (Reuters) – Petra Diamonds shares fell on Thursday after it reported selling 23% fewer diamond carats for 36% less revenue in the year to June 30 as the COVID-19 pandemic dealt a fresh blow to a struggling diamond industry.

Petra sold 2.9 million carats in its full-year 2020, down from 3.7 million in the previous year, while revenues dropped to $295.8 million from $463.6 million.

The falls reflect already weaker diamond prices to February this year, which were exacerbated when the pandemic disrupted sales cycles. Petra shares were down 5.8% at 1.55p by 0758 GMT. The stock has fallen 81% this year, Refinitiv data showed.

Petra cancelled May and June tenders because of travel restrictions and low demand from the midstream. It plans to hold its next tender in September.

The African diamond miner is restructuring debt. It said discussions with noteholders and South African lenders continued and it expects to announce progress this quarter.

Production fell 7% year-on-year, partly because Petra’s Williamson mine in Tanzania has been shut since the start of April. It remains suspended due to the impact of low pricing on its liquidity, the company said.

South Africa’s coronavirus lockdown also caused Petra’s mines there to shut for three weeks from March 26.

Petra said it is targeting a ramp-up to pre-COVID-19 production levels, and will give production guidance for 2021 once it reaches a “sustainable level of operational stability”.

Petra’s free cash flow fell to $53.6 million by June 30, from $64.2 million on March 30, while net debt rose to $658 million from $601 million.

As South Africa’s COVID-19 epidemic worsens, Petra said 39 workers have been confirmed coronavirus positive at its South African operations so far, and one worker at the Cullinan mine has died of the respiratory disease.

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