By Michelle Graff
London--Despite production dropping 2 percent, Petra Diamonds saw a 16 percent increase in revenue to $214.8 million in the first half of the fiscal year 2015, ended Dec. 31.

Production dropped to 1.6 million carats but the mining company said “costs remain well controlled” and the weaker rand (the currency of South Africa) had a positive effect on Petra’s operating costs in U.S. dollar terms.

Petra’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was up 22 percent to $84.9 million from $69.4 million in the first half of fiscal year 2014. Adjusted net profit after tax rose 37 percent to $42.8 million.

While Petra said softer rough diamond market conditions were experienced in the first half of the year, its first tender of the second half of fiscal 2015 “saw good levels of interest and slightly firmer market conditions.”

Petra has interest in five producing mines: the Finsch, Cullinan, Koffiefontein and Kimberley Underground mines in South Africa, and Williamson in Tanzania. It also maintains an exploration program in Botswana. The company has a core objective to steadily increase annual production to 5 million carats by 2019.

Boosting revenue in the first half of 2015 were the sales of two exceptional diamonds from the Cullinan mine: a 232-carat white diamond that sold for $15.2 million, and a 122-carat blue diamond sold into a beneficiation partnership agreement. Petra received $23.5 million for an 85 percent share in the stone.  

Carats sold in the half-year were down 1 percent to 1.4 million carats, and Petra said carat sales were lower than carats produced due to the seasonal timing of its tenders. The company said it plans to hold four tenders in the second half of the year.

“While the diamond market remains under pressure, there are encouraging signs that we are seeing a stabilization in market conditions, as evidenced by good demand levels at our first tender in H2 FY 2015,” Petra Diamonds CEO Johan Dippenaar said. “Our continued growth trajectory and robust financial position places Petra in a good position to capitalize on the attractive medium- to long-term fundamentals of our industry.” 

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