Petra Diamonds Reports Mixed Tender Results Amid Product Mix Challenges
Why we think this is neutral
The RNS announcement from Petra Diamonds provides a mixed picture. While the company reported a 34% increase in revenue from the combined Tender 5 & 6 sales, the average price per carat is down 16% year-over-year due to product mix issues at the Cullinan mine. The company expects the product mix to improve, but the timeline is unclear, and there are ongoing market uncertainties. Overall, the results are neither strongly positive nor negative, warranting a neutral sentiment score.
Key Points
- Petra Diamonds reported a 34% increase in revenue from its combined Tender 5 & 6 sales, totaling $53 million
- Average price per carat was $86, up 4% from the previous tender but down 16% year-over-year
- Product mix issues at the Cullinan mine resulted in a 6% decline in prices compared to the previous tender
- The company expects the product mix to improve as production ramps up from new areas
Summary
Petra Diamonds Limited (LSE: PDL) has announced its combined Tender 5 & 6 sales results for FY 2025, reporting total revenue of $53 million from the sale of 613,682 carats, at an average price of $86 per carat. This represents a 34% increase in revenue compared to the previous tender.
However, the company's YTD average price per carat is down 16% compared to the same period last year, mainly due to weaker prices in smaller size categories. Petra Diamonds is also experiencing product mix issues at its Cullinan mine, which have resulted in a 6% decline in prices achieved compared to the previous tender. The company expects the product mix to improve as production ramps up from new areas.
In light of the ongoing market uncertainty and the product mix challenges, Petra Diamonds will continue to keep its pricing assumptions for FY 2025 under review.