Petra manipulates diamond sales mix to improve prices at the cost of rising debt

Petra Diamonds increased overall average diamond prices by 13% for the first two tenders of its financial year to June 2025 by manipulating its offered product mix through deferring sales of low value South African production.According to CEO Richard Duffy revenues for the quarter to end-September were also boosted by the sale for $8.5m of an 18.85 carat blue diamond of exceptional quality found in the Cullinan Mine.Duffy said Petra decided to “defer the sale of the majority of our South African goods from Tender 1 in August/September to support steps taken by the major producers to manage supply. “Petra withdrew around 88,000 carats – worth about $3m – of brown goods “as a result of poor demand for that particular category.”Duffy added, “Our combined first and second tenders indicate continued weakness in the rough diamond market, more than offset by Petra’s product mix.”The cost of these marketing moves was an increase in Petra’s consolidated net debt which reached $285m at end-September from $201m at end-June. Duffy said Petra drew down $48m from its revolving credit facility “which will reduce once the proceeds from the recently closed combined Tenders 1 and 2 are received.”Duffy added, “a further review of cash generation opportunities is currently underway to mitigate the impact of on-going weakness in the diamond market and a stronger rand and we remain committed to our target of net cash generation for the full year in financial year 2025. “He remained positive on the longer-term outlook for the diamond market despite the on-going current weakness in prices and commented, “we continue to expect prices to show some improvement in calendar year 2025 with market fundamentals being supportive in the medium – to – longer term.”Petra has maintained its pricing assumptions for the remainder of the year unchanged from previous forecasts but – despite this apparent optimism – Duffy warned that, “future diamond prices are influenced by a range of factors outside of Petra’s control and so these assumptions are internal estimates only and no reliance should be placed on them.”The post Petra manipulates diamond sales mix to improve prices at the cost of rising debt appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.comWeiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com