Trans Hex Reports Fall in H1 Profits

Diamond miner Trans Hex on Tuesday reported a 35 percent decline in headline earnings per share to 86.3 cents for the first half of its fiscal year from 132.5 cents a year earlier harmed by the rand / U.S. dollar exchange rate.

 

Diamond sales were two percent lower in rand terms at 532.8 million rand, and 18 percent higher in dollar terms at $82.5 million.

The rand strengthened by 14.2 percent during the six-month period but if it had remained at last year's average level headline earnings for the six months would have been $1.63 cents per share, the group said.

Mining income decreased by 46 percent to 138.3 million rand while cost of sales increased 25.3 percent to 394.5 million rand.

The group's activities in Angola increased with the Luarica project moving from ramp-up to production phase and Fucauma commencing pilot production in March.

Total diamond production amounted to 120,700 carats, up from 107,400 carats a year earlier.

Trans Hex said that demand for rough diamonds, together with U.S. dollar pricing levels during the period under review remained positive. During the six-month period, Trans Hex sold two stones larger than 100 carats in weight, one of which sold for more than $1 million.

At the last tender for the period, held in September, it sold 30,500 carats of rough diamonds for about $28 million, an average of $918 per carat, down from $1,000 per carat raised at its July tender.

The company is currently holding another tender in South Africa, open to any locally registered diamond company. 23,800 carats are being offered in the current tender due to end on November 17.

The company said it is confident that demand for Trans Hex production will remain strong for at least the remainder of its financial year.

Trans Hex said it remains optimistic that current dollar diamond prices will be maintained, although a sustained rand-dollar exchange rate at present levels will negatively impact on earnings for the full financial year.