Petra Diamonds shares were largely flat on Tuesday as investors decided not to jump into the diamond producer’s stock after a tepid indication of full-year sales.
The company is struggling with lower diamond prices as the miner managed to increase the number of carats sold, but lower average prices meant revenue declined over the full-year period.
Petra sold 2,450,613 carats in 2024, up from 2,237,010 in 2023. However, average selling prices fell to 116US$/ct from 141US$/ct. The result was a decline in total sales to $285m from $316m.
“It’s been a tough start to the year for Petra Diamond’s shareholders. With the share price plummeting by 40%, shareholders will have been eager for some good news in this morning earnings update,” said Mark Crouch, analyst at investment platform eToro.
“Unfortunately, due to lower production and depressed diamond prices, sales and profits have fallen in 2024 compared to the same period last year.
“Petra Diamonds, who own one of the world’s largest producing diamond mines, have encountered significant headwinds in recent years in what is fast becoming an increasingly challenging industry. Following heightened demand for diamonds during the global lockdowns, demand has since dissipated resulting in a plunge in prices, with many retailers now overstocked. Couple that with the rising popularity of lab-grown diamonds, which while not dug out the ground, are identical, and a fraction of the price of their mined counterparts.
“With the controversy Petra Diamonds has faced in recent years, lab-grown diamonds offer the purchaser the reassurance they were ethically sourced. And if their growing popularity continues to increase, Petra will need to adapt to stay ahead of the game.”
