Petra Diamonds warns rand strength a “major headwind”

PETRA Diamonds continues to leak cash as “subdued” market prices were made worse by a strengthening of the rand against the dollar – identified by the miner as a fresh headwind.The company reported a $6m operational cash outflow (2025: +$16m) for the six months ended December on the back of lower sales which was due to timing differences, it said. Average realised prices for the six months were unchanged period-on-period, but at $104 per carat, higher than the 2025 average of $87/carat.All in all, Petra reported a net loss after tax of $188m compared to a loss of $69m for the first half of last year. Net debt increased to $284m as of December 31 compared to net debt of $261m as of June 30 last year which was Petra’s financial year-end.The group undertook a massive recapitalisation – the second in recent years – unveiled in August in which extended R1.75bn in senior long-term debt to December 2029 while increasing interest payable, and amortising R750m of the sum by June 2029. The debt was to have matured in January this year. The package also included a $25m rights offer.Distressingly, the outlook for Petra is more difficulty as diamond prices remain constrained. Prices for smaller diamonds were put under “further strain”, it said. On a like-for-like basis, prices fell a fifth from the first to the second quarter of the financial year.In addition, revenue for diamonds was reduced after the rand appreciated agains the dollar which Petra described as “another major headwind facing the business”. Some currency pain was offset by hedges but Petra warned that: “the continued strength of the rand going forward remains a risk to the business”.“Management continues to enforce strict cost control, assessing capital deferral or alternate capital sequencing opportunities and ensuring we mine the areas that have the highest contained revenue to mitigate for both the weaker market in the smalls as well as the stronger rand,” said Vivek Gadodia and Juan Kemp, Petra’s joint CEOs in a statement on Friday.Petra, which mines the Cullinan and Finsch mines in South Africa, operations formally the mainstay of De Beers’ production, continues to manage a significant inventory of diamonds, amid poor market conditions.As of December 31, diamonds on hand totalled 608,217 carats at a market value of $46m compared to 385,878 carats which were worth $40m on December 31, 2024.The post Petra Diamonds warns rand strength a “major headwind” appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com