Petra Diamonds now expects a slower recovery in diamond prices, reporting earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $38.9m (£31m) in the second half of 2023, down from $85.7m (£68m) in the previous year.
However, this sharp drop had been expected by analysts, with Peel Hunt analysts noting this was nine per cent higher than they had predicted, as the company had already reported declining revenues.
Petra had previously reported $187.8m (£149m) in revenue for the six months, compared to $208.5m (£167m) in the second half of the previous year.
However, its interim results, which were published today, revised production expectations for this year down, due to mechanical issues.
The average realised price per carat for the six months came in at $113 per carat (£90), in line with prices in the first half of the year but down 29 per cent from the second half of 2022, which the firm credited partially to a 13.3 per cent reduction in like-for-like prices.
Peel Hunt analysts said the results had been “broadly in line with expectations” and reiterated their Buy rating.
Richard Duffy, CEO of Petra, said the firm had “reacted swiftly to diamond market uncertainty, taking steps to improve resilience through ongoing cost and capital optimisation”.
“Whilst we believe that prices have now bottomed, we expect pricing to recover more slowly than initially thought,” he added.
“We have also commenced trials to further support the traceability of our product. We believe that offering verifiable origin and provenance has potential to significantly enhance the purchase experience, highlighting the inherent rarity and uniqueness of natural diamonds to consumers.”