Petra Diamonds full-year revenue down 10 percent

London--Despite a 2 percent increase in production, Petra Diamonds’ revenue decreased 10 percent as a weaker diamond market and reliance on diluted mining areas affected performance.

The company said that revenue declined from $471.8 million in 2014 to $425 million for the 2015 fiscal year ended June 30.

Petra’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was down 26 percent to $139.3 million, and adjusted net profit after tax was down 33 percent, decreasing from 2014’s $93.7 million to $62.8 million this year.

Petra’s production rose 2 percent to 3.2 million carats, and the company also reported an increased tonnage through-put for the year to 17.1 million tons.

The company said a weaker diamond market that resulted in lower prices--it continues to face obstacles stemming from liquidity and profitability--the impact of the strong U.S. dollar, and the slowdown in retail demand in China negatively impacted its results for the fiscal year.

The diamond miner did note, however, that it is seeing stable retail demand in the U.S. market.

Problems also arose from Petra’s underground production being dependent on mature, diluted mining areas.

Petra’s old mining areas have become heavily diluted with waste rock, especially at Cullinan. However, the company said it is in a transitional period to shift the old mining areas in the underground mines to new, undiluted kimberlite blocks.

The company said it expects ore from the new mining areas to start contributing significantly to production starting in the second half of fiscal 2016.

Exceptional diamond sales contributed $38.7 million to the bottom line in fiscal 2015, compared with $34.1 million fiscal 2014.

Petra sold two big diamonds during the year--a 232-carat white, which went for $15.2 million, and a 122-carat blue diamond that was sold into a beneficiation partnership agreement, with Petra receiving $23.5 million for an 85 percent share.

Petra said that in fiscal 2016, it has seen a strong start in terms of production and expects it to be up 3 to 6 percent year-over-year. In the first quarter, the company started construction of a modern processing plant at the Cullinan mine, which it expects to be fully operational by the end of fiscal year 2017.

Petra will hold its first tender of fiscal 2016 in early October.