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Interim Results

Petra Diamonds: Full year production could be at lower end of guidance

20 February 2017 15:17

Petra Diamonds said it remained on track to deliver full year production of ca. 4.4 - 4.6 Mcts but was mindful of the potential to be towards the bottom end of this range.

The company reported revenue climbed 48% to $228.5m (H1 FY 2016: $154m).

Adjusted EBITDA rose 80% to $87.1m (H1 FY 2016: $48.5m), while adjusted net profit after tax increased 348% to $28.2m (H1 FY 2016: $6.3m).

The company said net profit after tax was $35.2m (H1 FY 2016: $2.2m loss).

Operating cashflow rose 89% to $86.4m (H1 FY 2016: $45.6m).

Basic earnings per share stood at 5.27 US cents (H1 FY 2016: basic loss per share of 0.72 US cents).

Petra Diamonds revealed net debt was $463.6m (30 June 2016: $384.8m) with unrestricted cash and bank facilities of $94m (30 June 2016: $146.7m).


- Production up 24% to 2,015,087 carats (H1 FY 2016: 1,629,403 carats)

- Improving ROM grade profiles achieved as a results of accessing undiluted ore: +20% to 54.5 cpht (H1 FY 2016: 45.3 cpht) at Finsch and +34% to 34.5 cpht (H1 FY 2016: 25.7 cpht) at Cullinan.

- Costs remain well controlled despite inflationary pressures

- Capex of $134.9m (H1 FY 2016: $139.8m) excluding capitalised borrowing costs of $21.5m (H1 FY 2016: $11.5m), in accordance with the roll out of its expansion programmes.

- Safety: As previously announced, it is with deep regret that the group experienced five fatalities during H1 FY 2017, despite excellent safety records historically and a leading Lost Time Injury Frequency Rate ("LTIFR") of 0.25 achieved during the Period (H1 FY 2016: 0.37).

- Completion of joint venture agreement with Ekapa Mining to combine the operations of Kimberley Underground, Kimberley Mines (owned jointly by Petra and Ekapa Mining through Ekapa Minerals and Super Stone Mining to form an unincorporated joint venture named Kimberley Ekapa Mining Joint Venture with effect from 1 July 2016.


The execution of the Group's underground expansion projects at Finsch and Cullinan continued as expected.

Both Finsch's Block 5 SLC and Cullinan's C-Cut Phase 1 projects delivered initial production during the period, in line with earlier guidance, and both projects remained on track to deliver ca. 1 Mt each in FY 2017.

As announced in the H1 FY 2017 trading update, construction work on the new Cullinan plant was disrupted by contract labour stoppages.

These issues have been resolved and construction work resumed at the end of January 2017.

Commissioning is expected to commence towards the end of March 2017, around eight weeks later than originally planned, and ramp-up to full production during Q4 FY 2017.

The company said it is also envisaged that the old plant at Cullinan will continue to operate until the end of March / early April 2017 (previously planned to be decommissioned at the end of February 2017). The group's forecasts showed that Petra has sufficient banking facilities to meet its working capital and capital development requirements and that it maintains headroom against its financial covenants going forward.

Signs of stabilisation in the rough diamond market were evident and Petra expects conditions to remain stable in H2 FY 2017 (January to June 2017).

At 3:17pm: (LON:PDL) Petra Diamonds Ltd share price was -0.65p at 147.75p

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