Petra Diamonds revenue drops 10% in full year results

Petra Diamonds has announced that revenue for the year ended 30 June 2015 dropped by 10% to $425m (£271.7m) compared with the previous year, according to its preliminary unaudited results. Net profit after taxation was down a more considerable 33% to $62.8m (£40.2m). The firm put the decreases down to the reliance of its underground mines on mature, diluted mining areas, and also in terms of the softer diamond market, which saw lower pricing for the year. Johan Dippenaar, CEO, said: “As already reported, FY 2015 was a challenging period, both operationally, due to the reliance of our underground mines on the mature, diluted mining areas, and also in terms of the softer diamond market, which saw lower pricing for the year. "However, the group still recorded a number of important achievements, with increased tonnage throughput for the year, the continued delivery of our mine expansion projects, the strengthening of our balance sheet, due to the $300 million notes issue and increase in bank facilities, and the commencement of construction of a modern processing plant at Cullinan post year end in Q1 FY 2016. “While market conditions remain subdued in the short term, Petra is in a robust position given our strong balance sheet, efficient cost base and increasing operating margin profile as we start to access the new, undiluted mining areas at Finsch and Cullinan from FY 2016 onwards.” Financial Highlights Revenue down 10% to US$425.0 million (FY 2014: US$471.8 million). Adjusted EBITDA3 down 26% to US$139.3 million (FY 2014: US$187.7 million). Adjusted net profit after tax4 down 33% to US$62.8 million (FY 2014: US$93.7 million). Net profit after tax down 12% to US$59.6 million (FY 2014: US$67.5 million). Adjusted EPS4: 10.09 US$ cents per share (FY 2014: 14.82 US$ cents per share). Basic EPS from continuing operations: 9.46 US$ cents per share (FY 2014: 12.80 US$ cents per share). Adjusted operating cashflow8 down 22% to US$141.3 million (FY 2014: US$181.2 million). Net debt9: US$171.7 million (30 June 2014: US$124.9 million). Operational Highlights Production up 2% to 3.2 Mcts (FY 2014: 3.1 Mcts), in line with Company guidance. Operating costs remained well controlled. Capex of US$274.1 million (FY 2014: US$211.2 million), in accordance with the roll-out of the Group’s expansion programmes. Safety: Group LTIFR improved to 0.29 (FY 2014: 0.32). Gross Diamond Resources (inclusive of Reserves) increased 2.5% to 308.7 Mcts (30 June 2014: 301.1 Mcts). Outlook Expected FY 2016 production of 3.3 – 3.4 Mcts, an increase of 3 – 6% on FY 2015 production. Undiluted ore from the new mining areas will start to contribute meaningfully to the Group’s production profile from H2 FY 2016 onwards. Commencement of construction of a modern processing plant at the Cullinan mine post Year end. Petra has made a solid start to FY 2016 in terms of production, with the operations as a whole performing according to expectations, including achieved grades at Finsch and Cullinan. Further information will be provided in Petra’s Q1 FY 2016 Trading Update to be released late October. Petra remains firmly on track to reach longer-term target of ca. 5 Mcts by FY 2019. For FY 2016, the Company’s financial results are expected to be favourably impacted should the ongoing weakness in the Rand continue. Petra announced 2016 diamond pricing guidance in July 2015 with the assumption that pricing would remain flat in FY 2016 versus the pricing achieved for H2 FY 2015. Since then, volatility in the broader rough diamond market has been widely reported and these uncertain market conditions may result in deviations from Petra’s previously guided prices. Petra’s first tender of FY 2016 will be held in early October.

Petra Diamonds revenue drops 10% in full year results

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