Petra Diamonds has revised its rough diamond pricing forecast downward for the remainder of the fiscal year due to ongoing softness across most size categories.
The company now projects rough diamonds from its Cullinan mine in South Africa to sell for $120 to $130 per carat, down from the initial forecast of $125 to $135 per carat.
Similarly, diamonds from the Finsch mine are expected to fetch $80 to $90 per carat, compared to the earlier estimate of $98 to $105 per carat.
Production from the Williamson mine in Tanzania is forecasted at $170 to $200 per carat, reduced from the previous $200 to $225 per carat range.
The adjustments follow a 7% decline in like-for-like prices for most size categories during the company’s third tender in December, compared to its combined first and second tenders in October.
Year-to-date, like-for-like prices are down 10% compared to the same period last fiscal year, primarily driven by weakness in smaller diamond categories.
Revenue from the December tender fell 7% from the earlier tenders to $71 million. Despite a 17% increase in sales volume to 700,803 carats, the average price dropped 20% to $101 per carat.
Total sales for the first three tenders of the fiscal year reached $146 million, a 22% decrease compared to the same period last year, with both sales volume and the average price declining by 22% and 1%, respectively.
On a positive note, Petra reported a 3% price increase in rough diamonds between 5 and 10.8 carats during the December tender.
To address the challenging market conditions, Petra plans to cut jobs within its group and South African operational support teams as part of cost-reduction efforts.
Vivek Gadodia, previously head of planning and development, has been appointed as the company’s Chief Restructuring Officer to lead these initiatives.
“We remain committed to achieving net cash generation in fiscal 2025,” stated Petra CEO Richard Duffy. “This has necessitated additional cash-generation and savings initiatives, including a regrettable section 189 retrenchment process affecting our group and South African operations support teams.
Refinancing discussions have been deferred to allow these initiatives to take effect and to provide greater certainty regarding market conditions.”
Petra remains focused on navigating the challenging market environment while implementing measures to stabilize its financial position.
