Petra Diamonds eyeing quicker maiden dividend as annual profits jump

South Africa-focused diamond miner Petra said that strong production growth helped drive a big jump in annual profits for the year to 30 June, as it reiterated its target to produce 5m carats per annum by 2019.

The company also announced that it is "currently considering" bringing forward its maiden dividend payment from the previously expected date of 2016 and will provide more details in the future.

Annual revenues totalled $471.8m, up 20% on the year before, while adjusted operating profits increased 47% to $187.7m.

Production rose by 17% to 3.1m carats, as previously announced and ahead of the initial guidance of 3m.

Meanwhile, operating costs were "well controlled", with adjusted mining and processing costs rising just 9% to $277.4m.

The company, which disappointed some investors slightly this week with a lower-than-expected sale of a rare 122-carat blue diamond, has guided to higher rough diamond pricing in the current financial year. The company said this guidance is "underpinned by constrained supply and firm demand".

The blue diamond, found at its Cullinan mine, was valued at $27.6m with Petra will receive $23.5m upfront which will be recorded in its first-quarter results. This compared with analysts' forecast of at least $35m, though the company will also get 15% of the profit (if any) when the polished stone is sold.

Since the year-end the company has also discovered a 232-carat white diamond from Cullinan which is expected to be sold in the second quarter.

"There is [...] a positive outlook for the company, particularly given our expectations for further increases in production, rising margins, supportive rough diamond prices, and the continued contribution of exceptional diamonds," said chief executive Johan Dippenaar.

"We look forward to entering a period of significant cash generation and the commencement of dividend payments to our shareholders in due course."

The stock was up 1% at 197.8p in early deals on Thursday.