Petra Diamonds latest tender report shows varied performance for rough diamond prices, with notable challenges for smaller goods.
The report outlines the financial and operational outcomes from their fifth trading session of the fiscal year, which took place in April, offering insights into current industry trends.
Tender Performance and Financial Highlights
The April tender generated $49 million from the sale of 362,132 carats. This included the sale of a 14.76-carat blue diamond from the Cullinan mine in South Africa, which contributed $8.2 million. The session observed a modest decrease in like-for-like prices of 1% compared to the previous session in February. However, the total sales value marked a 3% increase from February’s $48 million and a 17% rise from the equivalent tender in May 2023.
Despite these gains in value, the volume of diamonds sold dropped 16% from February 2024 and 23% year on year. The average price per carat increased to $136, up from $112 at the previous tender, largely due to the inclusion of the high-value blue diamond.
Market Dynamics and Production Insights
There was a noticeable decline in rough diamond prices for smaller-sized goods, reflecting seasonal trends. Prices for diamonds over 2 carats remained stable, indicating consistent demand for larger stones. For the fiscal year to date, the average like-for-like prices were down by 8.5% compared to the previous year.
Production increased slightly during the January-to-March quarter, with a 1.9% rise to 665,577 carats. The company is optimistic about meeting its annual production guidance of between 2.75 million and 2.85 million carats.
Financial Stability and Outlook
Revenue for the third fiscal quarter, ending March 31, declined by 1.5% year-on-year to $66 million and decreased by 27% from the previous quarter, influenced by lower production and the timing of revenue realization from the fifth tender. However, sales volume for the year-to-date increased by 21% to 2.1 million carats, matching a 2% growth in production.
The company’s debt increased to $232 million by the end of March, up from $212 million at the end of December.
Implications for the Jewellery Industry
For jewellers and stakeholders, Petra Diamonds’ latest figures provide a nuanced understanding of the market. The sustained interest in larger diamonds indicates a stable market for premium products, while the volatility in smaller diamond prices may reflect changes in consumer preferences or economic conditions. Jewellers should consider these trends when adjusting their inventory and marketing strategies to better align with current market conditions.
