Africa-focused Petra Diamonds (LON: PDL) has cut its price forecasts for 2025 and announced job cuts affecting group operations and South African support functions, in a fresh effort to reduce costs and boost cash flow amid ongoing challenges in the global diamond market.
The restructuring will be led by Vivek Gadodia, who has been appointed chief restructuring officer. Refinancing plans have been postponed until 2025 to prioritize cash generation. “We remain confident in a successful refinancing (…) and will provide further updates with our interim results in February,” chief executive officer, Richard Duffy, said in a statement.
The company’s move comes only days after De Beers, the world’s largest diamond producer by value, cut the prices of its mined gems by more than 10%.
Petra’s third tender for the 2025 financial year delivered mixed results. While sales volumes rose, both revenue and prices declined. The company sold 700,803 carats during the third tender, a 17% increase compared to the combined 600,161 carats sold in the first two tenders.
The Cullinan mine reported an average price of $100 per carat in the third tender, down from $146 per carat in earlier tenders but slightly above the year-to-date average of $112 per carat for the 2024 financial year. At the Finsch mine, the average price fell to $72 per carat from $84 per carat in earlier tenders, below the year-to-date average of $99 per carat in 2024. Meanwhile, the Williamson mine showed a modest improvement with an average price of $174 per carat in the third tender, up from $164 per carat in earlier tenders, though still below the previous year’s year-to-date average of $202 per carat.
In light of softer market conditions, Petra has revised its pricing assumptions for the 2025 financial year. Forecasts for the Cullinan mine have been lowered to between $120 and $130 per carat, while the Finsch and Williamson mines’ expectations have been adjusted to $80 to $90 and $170 to $200 per carat, respectively.
Year-to-date like-for-like diamond prices are down 10% compared to the same period in the 2024 financial year, driven largely by weaker demand for smaller-sized diamonds. Overall, sales revenue for the third tender fell 7% to $71 million, bringing year-to-date revenue to $146 million, a decline from $188 million during the same period last year. The average diamond price for the third tender was $101 per carat, a significant drop from $126 per carat in the first two tenders of the financial year.
Petra noted that diamond pricing remains heavily influenced by external market conditions and reaffirmed its commitment to closely monitoring the situation as it works to navigate these challenges and stabilize its operations.
Duffy said in September the company expected to see improvements in the sector during 2025 as increased discipline among diamond producers should help re-balance inventory levels across the supply chain.
