JOHANNESBURG (miningweekly.com) – LSE-listed Petra Diamonds increased its production by 31% during the six months ended December 31, remaining firmly on track to meet its full-year production guidance of three-million carats for 2014 and five-million carats a year by 2019, the company said on Thursday.

The 31% increase was mostly owing to increased production at the company’s Finsch operation, in the Northern Cape, and the continued ramp-up of tailings production at the Cullinan mine, in Gauteng.

“This strong first-half production rate was achieved despite the previously announced first-quarter labour action and work stoppages,” Petra said, adding that the labour situation at the company’s operations had remained stable since the end of this industrial action.

Petra on Thursday also reported a 19% increase in revenue for the first half of the 2014 financial year to $185.5-million, reflecting the increase in production, while profit from mining activities increased by 115% to $73.4-million.

The company’s adjusted earnings before interest, tax, depreciation and amortisation for the period was up 157% to $65.8-million, with net profit after tax amounting to $28.4-million, as opposed to a $15.2-million loss during the prior corresponding period. Earnings per share amounted to 4.7c.

Meanwhile, the company’s operating cash flow also increased by 249% during the period under review to $91.9-million.

Petra CEO Johan Dippenaar pointed out that, for the first time, during this period, the group’s capital expenditure, which amounted to $85.3-million, had been entirely funded by operating cash flow.

The group’s full-year spend remained on track to be in line with the 2014 financial year guidance.

Meanwhile, the miner stated that the market for rough diamonds had strengthened over recent months, with the company expecting this firmer market to continue, with solid results expected from the group’s tenders in the second half of the 2014 financial year.

Liberum Capital stated that it expected Petra’s results to be weighted to the second half of the year, with the majority of sales being completed, as well as owing to the inclusion of the sale of the $25.6-million blue diamond discovered, in January, at the Cullinan mine. 

Dippenaar echoed this, stating "we look forward to a strong second half, incorporating a continued firm rough diamond market, higher carat sales and higher revenue and cash flows augmented by the sale proceeds of the 29.6 ct blue diamond from Cullinan.”

Based on the company’s current operations and expansion plans, stated production growth, diamond prices and other factors, Petra expected to start considering paying dividends from the 2016 financial year onwards.