Petra Diamonds production up but revenue down 10%

Precious gem firm Petra Diamonds said production was up but revenues down 10% for the full year.

Petra said revenue fell by 10% from $471.8m in 2014 to $425m due to low average diamond prices and low grade and product mix resulting from its mature production areas.

The company said full year production was up 2% to 3.2Mct, from 3.1Mct in 2014, which was in line with company guidance.

However, the company reduced its production expectations for 2016 from 3.7Mct to between 3.3-3.4Mcts.

Petra said it was in a “transitional” period due to underground production being reliant on mature mining areas, especially at its Cullinan mine.

Chief executive Johan Dippenaar said production was at record levels despite challenging operating conditions during the period.

"It is encouraging to see that measures to manage the grade profile at Cullinan have yielded successful results in the last quarter, and are expected to continue to assist until undiluted ore meaningfully contributes to our production profile from H2 FY 2016."

FinnCap reiterated its ‘buy’ recommendation and reduced its price target to 237p.

Analysts said the production results were broadly as expected but Petra’s new guidance was significantly different, in particular production from Cullinan.

“Diamond price guidance has been generally reduced; prices are expected to remain flat for the next year at least.”

Shares were down 1.2% to 140.10p at 0848 BST.