Petra Diamonds first half revenue drops 28% but output rises

Petra Diamonds reported an increase in first half production but a drop in revenue as the group sold fewer diamonds at lower prices.

In a trading update for the six months to the end of December, the company said production was up 2% to 1.63m carats, exceeding its output target of 1.5m carats.

In addition, Petra said it remains on track to achieve full year production guidance of between 3.3m and 3.4m carats for 2016.

However, revenue in the period fell 28% to $154m (£108m) as the number of diamonds sold was down 7% and rough diamond prices slid around 9% on the year.

Still, Petra said the second half is expected to a be a stronger sales period due to the timing of tenders.

Chief executive Johan Dippenaar said: "Importantly our expansion programmes remain on track to deliver the first significant input of undiluted ore from the new mining areas in H2 FY 2016, which will lead to improved ROM grades and a better product mix.

“Also, the construction of the new plant at Cullinan is on track, and we look forward to the significant benefits this new plant will bring to bear at the mine. As always we remain focused on operational delivery, while maintaining a tight control of our cost base."

At 1050 GMT, Petra shares were up 0.4% to 71.75p.