Image credit: Petra Diamonds
Petra Diamonds says its financial year 2020 revenue decreased 36% to $295.8 million compared to $463.6 million, a year earlier, due to a weaker diamond market and the number of carats sold for the year dropping 23% to about 2,9 million carats from 3,7 million in the comparative period.
It said pricing was severely impacted by the COVID-19 pandemic and was down about 27% in the company’s combined March and April tenders in comparison to prices achieved in February 2020. Petra’s realised diamond prices fell by about 18% for the full financial year.
The group adopted a flexible approach to diamond sales to achieve the best possible route to market, subject to prevailing market conditions and any COVID-19-related regulations or restrictions. The measures included the export of rough from South Africa to Antwerp, where the lockdown and travel restrictions were less strict, as well as limiting sales in the fourth quarter, with the majority taking place through agreements with some of its long-standing customers.
Despite significant constraints on Petra’s South African operations, its production for the year at 3.59 million carats was 5.5% lower than the company’s pre-COVID-19 target of 3.8 million carats.
Post-year-end, production for the first quarter of 2021 was down 10% to 974,346 carats compared to about 1,1 million carats, a year earlier.
The decline was mainly due to Williamson mine in Tanzania being on care and maintenance.
Commenting on the outlook, Petra said conditions in the diamond industry began improving as lockdown measures around the world were eased and retail outlets reopened.
“Since the outbreak of COVID-19, a period of sustained low supply, particularly from the majors, De Beers and ALROSA, has allowed for a better equilibrium in the market and there is now improved demand from the downstream as retailers look to put orders in place in time for the festive retail season,” it said.
“The cutting and polishing factories of India have ramped up to [about] 60% capacity under COVID-19 guidelines, but are looking at how to maximise working hours to meet demand, including observing a much shorter holiday period for Diwali than usual.”
It said many producers had reinstated their usual sales tender pattern to match demand.
“However, all participants in the industry recognise that risks to a sustained recovery remain, particularly in light of the current resurgence of COVID-19 in key diamond markets, and much will depend on the level of consumer activity in the coming months, especially in the major US market,” said Petra.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
