Petra Diamonds produced 3.59 million carats during the year ended 30 June 2020, a 7% drop from 3.87 million carats, a year earlier.
It said production was severely disrupted by the lockdown implemented in South Africa from 26 March 2020 and the Williamson mine in Tanzania being placed on care and maintenance in April 2020.
Petra said production guidance for FY 2021 will be provided once a sustainable level of operational stability has been reached.
The group’s revenue also decreased 36% to $295.8 million compared to the previous year’s $463.6 million, reflecting weaker prices during the period to February 2020.
Significant price reductions and major disruptions to the planned sales cycles following the outbreak of the COVID-19 pandemic also worsened the situation.
“Despite our robust underlying business, significantly reduced revenues that are the result of a disrupted diamond market have required us to formally engage with our note holders and consider other strategic options to deliver a more sustainable capital structure going forward,” said Petra chief executive Richard Duffy.
The group’s net debt was $658 million as at 30 June 2020 from $601 million as at 31 March 2020.
Petra said it is continuing to explore strategic options to evaluate the optimal capital structure for the long-term success of the business, which includes running a formal sale process to invite suitable and deliverable offers for either the group or one or more of its assets.
Commenting on the diamond market, Petra said the disruption to supply caused by the COVID-19 pandemic will serve to exacerbate the longer-term trend of declining supply.
Data recently released by the Kimberley Process saw production by volume down 12% from 148.4millio carats in 2018 to 130.3 million carats in 2019 and down 7% by value from $14.5 billion in 2018 to $13.5 billion in 2019.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
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