REG-Petra Diamonds Ltd: H1 FY 2025 Interim Results (correction to title)
17/02/2025 08:15
17 February 2025 LSE: PDL
Petra Diamonds Limited
Interim results for the six months ended 31 December 2024 and final sales
results for Tender 4 FY 2025
Cost reduction measures driving improved cashflow, Petra continues to target
net free cashflow generation from FY 2025
Petra Diamonds Limited (Petra or the Company or the Group) announces its
unaudited interim results for the six months ended 31 December 2024 (the
Period or H1 FY 2025) and preliminary sales results for Tender 4 FY 2025.
Vivek Gadodia and Juan Kemp, joint interim Chief Executive Officers at Petra
Diamonds commented:
“These financial results reflect the successful implementation of the cost
reduction plans and smoothed capital profiles outlined at our investor day
last June, set against the prolonged period of weakness in the diamond market.
We have sustainably reduced our mining and processing costs from continuing
operations by 19% and capex by 32% from H1 FY 2024. Revenue was lower by US$49
million (30%) YoY largely due to ca. US$50 million of additional revenue from
tenders in FY 2023 being carried over to H1 FY 2024. However, as a result of
cost reductions, cash preservation measures, and working capital optimisation,
cash flow from operations increased to US$55 million (from US$34 million in H1
FY2024).
While cash flow from operations improved across the reporting periods from
items not impacting EBITDA (capital smoothing and working capital management),
12-month EBITDA was impacted mainly by lower revenue. Lower EBITDA over CY
2024 caused Petra not to meet the required leverage and interest cover
covenant ratios in its Revolving Credit Facility (RCF) measured at 31 December
2024. However, Petra has obtained a waiver from our lender, Absa Bank, in
relation to these covenant breaches. Petra continues to have sufficient
liquidity headroom to meet the liquidity covenant requirements under the RCF
and 2L Notes.
Cost reductions have been achieved through sustainably lowering overheads and
on-mine cost optimisation with limited impact on our operations. Finsch has
successfully transitioned into the 78-Level Phase II production areas and
achieved steady operations over the past quarter having transitioned to a
two-shift configuration during the first quarter of FY2025. Extension projects
at both of the mines remain on track, with production commencing from CC1E at
the Cullinan Mine during the Period.
Petra continues to target net free cashflow generation from FY 2025. As
announced at our H1 FY 2025 operating update in January, we have initiated a
multi-stream Restructuring Plan aimed at further reducing costs, optimising
capital spend and generating additional revenue. The overhead labour
restructure announced in December 2024 is expected to be completed by the end
of March 2025. In parallel, the Life of Mine plans review is underway.
Thereafter, we intend to re-engage with our lenders on the back of the revised
Business Plan, updated with our cost savings initiatives and updated Life of
Mine Plans.
During the Period, we completed the sale of our interest in Koffiefontein,
avoiding closure-related costs of US$23 million and entered into an agreement
in January 2025 to sell our interest in Williamson for a headline
consideration of up to US$16 million, which is expected to complete by
year-end. These steps, together with the Restructuring Plan of the business
that is underway, are intended to ensure that Petra is a focused, resilient
Company able to withstand pricing weakness, while positioning for upside in
stronger markets.
Highlights vs. H1 FY 2024 (excludes Williamson as a discontinued operation)
* Revenue amounted to US$115 million (H1 FY 2024: US$164 million), with the
decline largely due to the deferral of 456kcts (ca. US$50 million based on
average prices achieved for tender 1 of FY 2024) of sales from FY 2023 which
were sold in H1 FY 2024
* An average realised price of US$103/ct in-line with H1 FY 2024, reflecting
the positive impact of product mix over the Period offsetting the overall
weaker diamond pricing environment
* Adjusted mining and processing costs down 19% to US$98 million (H1 FY 2024:
US$121 million) demonstrating the impact of cost reduction measures
* Adjusted EBITDA of US$15 million, lower than US$38 million in H1 FY 2024,
largely due to revenue benefit in H1 FY 2024 outlined above
* Basic loss per share from continuing operations of USc30 and USc13 on an
adjusted basis after accounting for non-controlling interests
* Capital expenditure down 32% to US$30 million (H1 FY 2024: US$44 million) in
line with the capital spend profile announced at Petra’s investor day in
June 2024
* Operational free cash inflow of US$16 million compared to US$21 outflow in
H1 FY 2024, largely reflecting the impact of cost reduction measures, capital
smoothing, and working capital management
* At Period-end, an amount of US$50 million remained available for drawdown on
the RCF, with drawdowns of US$56 million and repayments of US$36 million made
during H1 FY 2025 relating to working capital needs and the repurchase and
cancellation of US$24 million of the Company’s 2L Notes. Petra has suspended
its 2L Notes Open Market Repurchase programme and is now focused on
recommencing engagements with lenders regarding the refinancing of its debt
* Consolidated net debt increased to US$215 million as at 31 December 2024 (30
June 2024: US$193 million) due to diamond market weakness and the timing of
our tender sales, with three tenders taking place in H1 FY 2025 and four
scheduled in H2 FY 2025, partially offset by cost control and capital spend
profile efficiencies
* In October 2024, Petra announced the completion of the sale of Koffiefontein
to the Stargems Group, avoiding incurring closure-related costs of US$23
million
* Post Period-end, Petra announced it had entered into an agreement with Pink
Diamonds Investments Limited to sell its entire shareholding in Williamson for
a headline consideration of up to US$16 million
* On 17 February 2025, Petra announced that Richard Duffy has resigned as
Chief Executive Officer and Director of the Company by mutual agreement and
with immediate effect. Vivek Gadodia (Chief Restructuring Officer) and Juan
Kemp (Operations Executive: Cullinan Mine) have been appointed as joint
interim Chief Executive Officers, with Vivek Gadodia responsible for all
corporate matters and with Juan Kemp responsible for operations and capital
projects
Summary of financial results
US$m unless stated otherwise (excluding discontinued operations, except where specifically mentioned) H1 FY 2025 H1 FY 2024 (re-presented) 2 FY 2024 (re-presented) 2
Rough diamonds sold (carats) 1,113,383 1,539,332 2,860,865
Revenue 115 164 310
Average realised price per carat (US$/carat) 103 106 108
Adjusted mining and processing costs 98 121 234
Adjusted EBITDA 1 15 38 70
Adjusted EBITDA margin (%) 1 13% 23% 23%
Adjusted loss before tax 1 (30) (11) (34)
Adjusted loss after tax 1 (24) (6) (20)
Net loss after tax (Including discontinued operations) (69) (11) (107)
Basic loss per share (USc) (30) (2) (31)
Adjusted loss per share 1 (USc) (13) (2) (7)
Capital expenditure 30 44 74
Operational free cash flow 16 (21) (15)
Consolidated net debt 215 203 193
Unrestricted cash 51 57 20
Consolidated net debt:Adjusted EBITDA 1 4.45x 3.1x 2.7x
Note 1: For all non-GAAP measures refer to the Summary of Results table within
the Financial Results section below.
Note 2: During H1 FY 2024, Williamson met the criteria to be classified as a
discontinued operation as it had been ‘held for sale’ in terms of IFRS 5.
For comparative purposes, the relevant H1 FY 2024 results have been
re-presented to exclude Williamson.
Safety
LTIFR and LTIs increased to 0.23 and 6, respectively (H1 FY 2024: 0.15 and 5,
respectively) resulting in Petra implementing a number of behaviour-based
interventions in Q2 FY 2025 improving health and safety performance
Adjusted profit contribution per mine
US$ millions H1 FY 2025 1 H1 FY 2024 Restated 1,2
CDM FDM Total CDM FDM Total
Revenue 78 37 115 97 67 164
Adjusted mining and processing costs 3 (53) (45) (98) (63) (58) (121)
Other direct income — 1 1 1 — 1
Adjusted profit from mining activities 25 (7) 18 35 9 44
Adjusted profit margin 32% — 16% 36% 13% 27%
Adjusted Group G&A Not allocated per mine (3) Not allocated per mine (6)
Adjusted EBITDA 1 15 38
Note 1: For all non-GAAP measures refer to the Summary of Results table within
the Financial Results section below
Note 2: H1 FY 2024 re-presented to exclude Williamson which is classified as a
discontinued operation.
Note 3: Adjusted mining and processing costs include certain technical and
support activities which are conducted on a centralised basis; these include
sales & marketing, human resources, finance & supply chain, technical, and
other functions. For purposes of above, these costs have been allocated 60% to
Cullinan Mine and 40% to Finsch. For more information, refer to operational
cost reconciliation available on the analyst guidance pages on our website.
Adjusted profit from mining activities decreased to US$18 million (H1 FY 2024:
US$44 million), with the decline largely due to the increased revenue in H1 FY
2024 as a result of 456kcts of sales deferred from FY 2023, partly offset by
a reduction in adjusted mining and processing costs through the cost reduction
measures initiated in FY 2024.
Capital expenditure breakdown
US$ millions H1 FY 2025 H1 FY 2024 Adjusted 1
Cullinan Mine Finsch Central Total Cullinan Mine Finsch Central Total
Extension 15 11 — 26 22 12 — 34
Stay in Business 1 2 1 4 5 4 1 10
Total 16 13 1 30 27 16 1 44
Note 1: H1 FY 2024 adjusted to exclude Williamson, which is classified as a
discontinued operation.
Total capital expenditure amounted to US$30 million for the Period, mainly due
to the ongoing underground extension projects at both Cullinan Mine and
Finsch.
Group production summary (excludes Williamson)
Production H1 FY 2025 H1 FY 2024
ROM tonnes Tonnes 3,207,473 3,395,856
Tailings and other tonnes Tonnes 208,627 187,243
Total tonnes treated Tonnes 3,416,100 3,583,099
ROM diamonds Carats 1,085,665 1,186,316
Tailings and other diamonds Carats 114,000 80,636
Total diamonds Carats 1,199,665 1,266,952
Outlook and update on our refinancing timeline and plans
We continue to focus on improved business resilience and a successful
refinancing of our debt in CY 2025. Life of Mine replanning work is ongoing to
further optimise costs and future extension capital expenditure while
enhancing revenue generation,, along with the labour restructure announced in
December 2024. Petra anticipates recommencing refinancing engagements with
lenders, having updated its business plan to reflect its restructured cost
base and updated life of mine plans.
We have suspended the 2L Notes Open Market Repurchase programme and remain
focussed on recommencing refinancing engagements with lenders.
Operationally, Cullinan Mine and Finsch continue to perform well, and we
remain on track to meet our production guidance of 2.4 – 2.7 Mcts for the
year, now excluding Williamson as a discontinued operation with the sale to
Pink Diamonds expected to be completed during the first quarter of CY 2025.
Final sales results for Tender 4 FY 2025 (includes Williamson)
Sales for the fourth tender cycle of FY 2025 closed this week, yielding US$39
million from 476 kcts sold. Average prices decreased 18% over Tender 3 FY
2025, with product mix contributing 12% and a 6% decrease in like-for-like
prices.
Rough diamond sales results for the respective periods are shown below.
Tender 4 FY 2025 Feb 25 Tender 3 FY 2025 Dec 24 Variance YTD FY 2025 Tenders 1-4 YTD FY 2024 1 Tenders 1-4 FY 2024
Diamonds sold (carats) 476,265 700,803 -32% 1,777,229 2,088,481 3,158,780
Sales (US$ million) 39 71 -45% 185 236 366
Average price (US$/ct) 83 101 -18% 105 113 116
1Revenue and volume variances were impacted by the deferral of the final
tender of FY 2023 into FY 2024, leading to higher sales in the comparative YTD
FY 2024 period.
Price comparison by operation
Mine by mine average prices for the respective periods are set out in the
table below:
US$/carat Tender 4 FY 2025 Feb 25 Tender 3 FY 2025 Dec 24 YTD FY 2025 Tenders 1-4 YTD FY 2024 Tenders 1-4 FY 2024
Cullinan Mine 77 100 107 109 116
Finsch 67 72 76 100 98
Williamson 173 174 170 207 191
As a result of the latest tender results, our revised pricing assumptions for
FY 2025 are:
US$ per carat FY 2025 Previous FY 2025 Revised
Cullinan Mine 120 – 130 110 – 120
Finsch 70 – 80 70 – 80
Williamson 170 – 200 170 – 200
Future diamond prices are influenced by a range of factors outside of
Petra’s control and so these assumptions are internal estimates only and no
reliance should be placed on them. The Company’s pricing assumptions will be
considered on an ongoing basis and may be updated as appropriate.
A recording of the webcast will be available later today on Petra’s website
at: https://www.petradiamonds.com/investors/results-reports-presentations/
Petra will present the results on the Investor Meet company platform,
predominantly aimed at retail investors. To join:
https://www.investormeetcompany.com/petra-diamonds-limited/register-investor
INVESTOR WEBCASTS
Webcast presentation for institutional investors and analysts at 09:30am GMT
on Tuesday 18th February 2025
Petra’s joint interim CEOs, Vivek Gadodia and Juan Kemp, and CFO, Johan
Snyman, will host a webcast for institutional investors and analysts to
discuss this operating update.
Lines will be open from 09:15am GMT and participants are encouraged to
register early to avoid queues around the start time of 09:30am GMT.
To join:
https://events.teams.microsoft.com/event/46d7efab-1763-4a2a-83dd-e3a625d76798@3c08cd12-de9b-4814-9ea3-392066758217
Link for recording (available later in the day):
https://www.petradiamonds.com/investors/results-reports/
Investor Meet Company webcast at 14.30pm GMT today on Tuesday 18th February
2025
Petra's joint interim CEOs, Vivek Gadodia and Juan Kemp, and CFO, Johan
Snyman, will also present these results live on the Investor Meet
Company platform, predominantly aimed at retail investors.
To
join: https://www.investormeetcompany.com/petra-diamonds-limited/register-investor
FURTHER INFORMATION
Petra Diamonds, London
Patrick Pittaway Telephone: +44 (0)784 192 0021
Kelsey Traynor
investorrelations@petradiamonds.com
ABOUT PETRA DIAMONDS
Petra Diamonds is a leading independent diamond mining group and a supplier of
gem quality rough diamonds to the international market. The Company’s
portfolio incorporates interests in two underground mines in South Africa
(Cullinan and Finsch Mines) and one open pit mine in Tanzania (Williamson). In
January 2025, Petra announced that it has entered into an agreement to sell
its entire shareholding in the entity that holds Petra's interest
in Williamson.
Petra's strategy is to focus on value rather than volume production by
optimising recoveries from its high-quality asset base in order to maximise
their efficiency and profitability. The Group has a significant resource base
which supports the potential for long-life operations.
Petra strives to conduct all operations according to the highest ethical
standards and only operates in countries which are members of the Kimberley
Process. The Company aims to generate tangible value for each of its
stakeholders, thereby contributing to the socio-economic development of its
host countries and supporting long-term sustainable operations to the benefit
of its employees, partners and communities.
Petra is quoted on the Main Market of the London Stock Exchange under the
ticker 'PDL'. The Company’s loan notes, due in 2026, are listed on EuroNext
Dublin (Irish Stock Exchange). For more information, visit
www.petradiamonds.com.
FINANCIAL RESULTS
SUMMARY RESULTS (unaudited)
6 months to 31 December 2024 (“H1 FY 2025”) (Re-presented) 9 6 months to 31 December 2023 (“H1 FY 2024”) (Re-presented) 9 Year ended 30 June 2024 (“FY 2024”)
US$ million US$ million US$ million
Revenue 115 164 310
Adjusted mining and processing costs 1 (98) (121) (234)
Other net direct mining income 1 1 2
Adjusted profit from mining activity 2 18 44 78
Other corporate income 1 — —
Adjusted corporate overhead 3 (4) (6) (8)
Adjusted EBITDA 4 15 38 70
Depreciation and amortisation (32) (38) (77)
Share-based payment expense (1) (1) (1)
Net finance expense (12) (10) (26)
Adjusted loss before tax (30) (11) (34)
Tax credit (excluding taxation credit on impairment charge) 5 6 5 14
Adjusted net loss after tax 6 (24) (6) (20)
Accelerated depreciation (1) — —
Impairment charge – operations and other receivables 7 — — (1)
Impairment charge – operations and non-financial receivables 7 (48) — (78)
Impairment charge – BEE receivables 7 (5) — (3)
Labour restructure costs (2) (5)
Gain on extinguishment of Notes 5 — 1
Human rights IGM claims provision and transaction costs of settlement agreement 1 (1) (2)
Net unrealised foreign exchange (loss) / gain (12) 1 7
Taxation charge on unrealised foreign exchange gain — — (2)
Taxation credit on impairment charge 13 — 21
Loss from continuing operations (73) (6) (82)
Profit / (loss) on discontinued operations, net of tax 8 4 (5) (25)
Net loss after tax (69) (11) (107)
Loss per share attributable to equity holders of the Company – US cents
Basic loss per share – from continuing and discontinued operations (28) (5) (44)
Basic loss per share – from continuing operations (30) (2) (31)
Adjusted loss per share 10 (13) (2) (7)
Notes:
The Group uses several non-GAAP measures above and throughout this report to
focus on actual trading activity by removing certain non-cash or non-recurring
items. These measures include adjusted mining and processing costs, profit
from mining activities, adjusted EBITDA, adjusted net profit after tax,
adjusted earnings per share, adjusted US$ loan note, and consolidated net debt
for covenant measurement purposes. As these are non-GAAP measures, they
should not be considered as replacements for IFRS measures. The Group’s
definition of these non-GAAP measures may not be comparable to other similarly
titled measures reported by other companies. The Board believes that such
alternative measures are useful as they exclude one-off items such as the
impairment charges and non-cash items to provide a clearer understanding of
the underlying trading performance of the Group.
1. Adjusted mining and processing costs are mining and processing costs stated
before depreciation and amortisation and labour restructure costs.
6 months to 31 December 2024 (“H1 FY 2025”) (Re-presented) 6 months to 31 December 2023 (“H1 FY 2024”) 8 (Re-presented) Year ended 30 June 2024 (“FY 2024”)
US$ million US$ million US$ million
Mining and processing costs 131 159 314
Depreciation and Amortisation (33) (38) (76)
Labour restructure costs — — (4)
Adjusted mining and processing costs 98 121 234
1. Adjusted profit from mining activities is revenue less adjusted mining and
processing costs plus other direct mining income.
2. Adjusted corporate overhead is corporate overhead expenditure less
corporate depreciation costs, share-based expense, S189 restructure costs
(related to corporate cost centres) and non-recurring costs related to the IGM
claims.
3. Adjusted EBITDA is stated before depreciation, amortisation of right-of-use
asset, share-based payment expense, net finance expense, tax credit/(charge),
impairment reversal/(charges), expected credit loss charge, S189 restructure
costs, gain on extinguishment of 2L Notes, recovery of fees relating to
investigation and settlement of human rights abuse claims, any accelerated
depreciation, unrealised foreign exchange gains and results from discontinued
operations.
4. Tax credit is the tax credit for the Period excluding the taxation credit
on impairment charges to property, plant and equipment and unrealised foreign
exchange movements for the year; such exclusion more accurately reflects
resultant Adjusted net loss after tax.
5. Adjusted net loss after tax is net loss after tax stated before any
impairment charges, labour restructure costs, gains on extinguishment of Notes
net of unamortised costs, any accelerated depreciation, recovery of fees
relating to investigation and settlement of human rights abuse claims net
unrealised foreign exchange movements for the Period.
6. Impairment charge of US$53 million (30 June 2024: US$83 million and 31
December 2023: US$nil (2023: US$15 million reversal) was due to the Group’s
impairment review of its operations and other receivables. Refer to note 5 for
further details. The impairment of US$53 million comprises a US$48 million (30
June 2024: US$78 million and 31 December 2023: US$nil) impairment charge to
property, plant and equipment and impairment charges of US$5 million (30 June
2024: US$3 million and 31 December 2023: US$nil) relating to the loans
receivable from the Group’s BEE Partners.
7. The profit on discontinued operations reflects the results of the
Williamson and Koffiefontein operations (net of tax), including the profit on
disposal of Koffiefontein of US$9 million and impairment charges of US$nil,
(30 June 2024: US$3 million charge and 31 December 2023: US$nil).
8. During H1 FY2025, Williamson met the ‘held for sale’ criteria in terms
of IFRS 5. The H1 FY 2024 and FY2024 results have been re-presented to include
Williamson as a discontinued operation for comparability as per the
requirements of IFRS 5; refer to Note 12.
9. Adjusted LPS is stated before impairment charge, movements in the expected
credit loss provision, gain on extinguishment of Notes net of unamortised
costs, acceleration of unamortised costs on restructured loans and borrowings,
costs and fees relating to investigation and settlement of human rights abuse
claims, provision for unsettled and disputed tax claims and net unrealised
foreign exchange movements, S189 restructure costs, and the impact on taxation
of impairment charges/reversals to property, plant and equipment and
unrealised foreign exchange movements for the Period.
Group Principal Risks – H1 FY 2025 Interim Results The Group is exposed to a number of risks and uncertainties which could have a material impact on its long-term development, and performance and management of these risks is an integral part of the management of the Group. A summary of the risks identified as the Group’s principal external, strategic and operational risks (in no order of priority), which may impact the Group over the next 12 months is listed below.
External Risks Change in FY 2025: H1
1. Rough diamond prices Risk appetite: High Risk Rating: Severe Nature of risk: Long term No change – Following the declining trend in rough diamond prices in FY 2024, l ike-for-like prices were down 10% in H1 FY 2025 compared to H1 FY 2024, mainly from smaller size categories. Tender 3 of FY 2025 showed ongoing diamond price weakness at the
end of CY 2024, although there is encouragement from recent reports of stronger online jewellery demand in the US and stronger jewellery demand in India over the festive season and Diwali, respectively. This, together with reduced supply from the major
producers and industry-wide marketing efforts, should help rebalance inventories. On the back of recent tender results, the continued demand weakness from China and the current product mix, Petra revised its FY 2025 pricing assumptions for Finsch from
US$80/ct – US$90/ct to US$70/ct – US$80/ct and Cullinan Mine from US$120/ct – US$130/ct to US$110/ct – US$120/ct. The significant increase in the supply of cheap LGDs has also created further market pressure. To mitigate the continuing softening of prices
and achieve Petra’s target of net cash generation in FY 2025, additional cash generation and savings initiatives have been commenced, as further outlined below. As described in the ‘Basis of preparation including going concern’ in the Financial
Statements, certain factors (including this Rough Diamond Prices risk and the Refinancing risk below) indicate the existence of material uncertainties which may cast significant doubt on the Group’s ability to continue as a going concern.
2. Currency Risk appetite: High Risk Rating: Medium Nature of risk: Long term No change – In the wake of the South African elections in May 2024, the South African Rand strengthened during the period, averaging ZAR17.93 : US$1 (H1 FY 2024: ZAR18.69 : US$1). The Rand weakened towards the end of CY 2024, closing at ZAR18.85 : US$1.
Group policy remains to hedge a portion of South African diamond sales when weakness in the Rand allows.
3. Country and political Risk appetite: High Risk Rating: Medium Nature of risk: Long term Decrease – The risk of political instability remains in South Africa, though this risk reduced following the South African elections in May 2024 which resulted in the formation of the Government of National Unity. Country and political risk in Tanzania
remains lower due to the positive economic and structural changes implemented by the Government which were well received by the international community. National elections are due in October 2025. In January 2025, Petra announced the sale of its interests
in WDL and once this sale completes Petra’s exposure to Tanzanian country and political risk will be significantly reduced. Internationally, ongoing geopolitical risks, including in relation to the Middle East conflict and the war in Ukraine, continue to
impact other principal risks, in particular Rough Diamond Prices, Currency and Group Liquidity (see above and below). The risk and impact of potential new trade tariffs being imposed by the US is yet to be determined.
Strategic Risks Change in FY 2025: H1
4. Group Liquidity Risk appetite: Medium Risk Rating: High Nature of risk: Short to long term No change – Softening rough diamond prices (see above) continued to adversely impact Petra’s liquidity position in H1 FY 2025. Consolidated net debt increased to US$215 million as at 31 December 2024 (30 June 2024: US$193 million), mainly due to the
continued weak diamond market and timing of tender sales, with three tenders scheduled for H1 FY 2025 and four tenders for H2 FY 2025. The effect of the lower diamond pricing environment was partly offset by cost control and efficiencies in capital spend
profiles. To mitigate the continuing softening of prices and achieve Petra’s target of net cash generation in FY 2025, additional cash generation and savings initiatives have been commenced. A multi-stream Restructuring Plan has been initiated, which
includes fixed and variable labour cost reductions, non-labour cost reductions, capital optimisation and additional revenue generation initiatives. In addition, completion of the sale of the Koffiefontein Mine in October 2024, enabling Petra to avoid
closure costs of c.$15m-18m and the announcement of the sale of Petra’s interests in WDL, which sale is yet to complete, provide further mitigation of this risk. During H1 FY 2025, Petra purchased and cancelled 2L Notes with a nominal value of US$24
million through an open market repurchase programme. Further repurchases of 2L Notes under this programme has been suspended and the Group is now focused on recommencing engagements with lenders regarding the refinancing of its debt. Lower EBITDA over CY
2024 caused Petra not to meet the required leverage and interest cover covenant ratios in its Revolving Credit Facility (RCF) measured at 31 December 2024. However, Petra has obtained a waiver from our lender, Absa Bank, in relation to these covenant
breaches. Petra continues to have sufficient liquidity headroom to meet the liquidity covenant requirements under the RCF and 2L Notes. The Group continues to monitor the RCF covenants through to maturity of the facilities, although they remain highly
sensitive to fluctuations in production, product prices, product mix, and exchange rates. This leads to continued uncertainty and risk around future covenant breaches and potential events of default. As described in the ‘Basis of preparation including
going concern’ in the Financial Statements, certain factors (including relating to the Rough Diamond Prices risk above and the Refinancing risk below) indicate the existence of material uncertainties which may cast significant doubt on the Group’s ability
to continue as a going concern.
5. Licence to operate: regulatory and social impact & community relations Risk appetite: Medium Risk Rating: Medium Nature of risk: Long term No Change – FDM’s SLP4 performance in H1 FY 2025 resulted in the completion of two Local Economic Development (LED) projects and significant progress was made on Human Resource Development programs. At CDM, the DMRE conducted inspections of the proposed
SLP 4 LED projects in December 2024. Following such inspection, three of the five proposed projects were approved for inclusion in the final plan, with the regulator requesting the remaining two projects be amended to further demonstrate benefits for the
communities and then resubmitted. The Company completed the sale of the Koffiefontein Mine in October 2024 but Petra remains liable for funding certain ongoing social commitments relating to this mine that were made during its ownership. The IGM
continues to investigate historic allegations of severe human rights impacts in connection with security operations at Williamson, whilst implementing various actions to address findings from the Independent Monitors’ reports which have been published. The
Restorative Justice Projects (RJPs) at Williamson are progressing well and are near completion. Following completion of the sale of Petra’s interests in WDL to Pink Diamonds, Petra will continue to meet its ongoing commitments in relation to the IGM and
RJPs. The risk of illegal mining at Williamson is ongoing, given the nature and scale of the operation and challenges associated with securing such a large perimeter. During H1 FY 2025, a total of 349 incidents of illegal incursions onto the Williamson
mine lease area were reported, with 1,517 illegal miners observed on mine. Minor injuries sustained include 21 illegal miners and 4 security officers, while 55 illegal miners were apprehended.
Operating Risks Change in FY 2025: H1
6. Mining production (including ROM grade and product mix volatility) Risk appetite: Medium Risk Rating: High Nature of risk: Long term Increase – Ore processed increased 7% to 6.2Mt from 5.8Mt, largely due to improved performance at Finsch and Williamson. While total diamond production decreased marginally by 2% to 1.40Mcts for H1 FY 2025 (H1 FY 2024: 1.43Mcts), the Company’s FY 2025
production guidance of 2.8 – 3.1 Mcts for the Group remains unchanged. Finsch’s performance improved through H1 FY 2025 as mining successfully transitioned into fresher ore associated with the 78-Level Phase II, resulting in reduced dilution and more
predictable operations. Although Finsch has shown improvement, output still fell short of plan largely attributable to excessive waste ingress resulting in poor grade performance. Cullinan Mine and Williamson continued to perform well and according to
plan. At Cullinan Mine, good progress was made on the CC1E development project, with first contribution of higher-grade ore taking place in the second quarter. This project is expected to ramp-up over the next 16-18 months. Plant availability at Cullinan
Mine continued a positive trend, while the ability to hoist from underground remained constrained through to February 2025 when the required replacements of ground handling infrastructure were mostly completed, with full completion due during March 2025.
7. Labour relations Risk appetite: Medium Risk Rating: Medium Nature of risk: Short to medium term No Change – In June 2024, five-year wage agreements were concluded with the NUM and UASA covering the South African operations for the period July 2024 to June 2029 for employees in the A to C Paterson bands. This provides continued certainty on fixed
labour costs at Petra’s South African operations. As part of the cash savings initiatives mentioned above, Petra has regrettably commenced a section 189 process (retrenchment) affecting our Group and South African operations support functions. Unions have
been onboarded as part of this process and are involved in the consultation process which has already commenced.
8. Safety Risk appetite: Medium Risk Rating: Medium Nature of risk: Short to medium term No Change – In H1 FY 2025, LTIFR increased to 0.23 (H1 FY 2024: 0.1) and LTI increased to 6 (H1 FY 2024: 5) resulting in Petra implementing a number of behaviour-based interventions in Q2 FY 2025 that improved health and safety performance. As at 31
December 2024, Petra has been fatality free for 7.8 years.
9. Environment Risk appetite: Medium Risk Rating: Medium Nature of risk: Long term No Change – The sale of the Koffiefontein mine completed in October 2024 enabling Petra to avoid incurring closure-related costs of c. US$15m-US$18m. Water levels at the tailings facility (No 7 Dam) at the Cullinan Mine remain at acceptable levels through
effective dewatering activities, avoiding the need for emergency releases of water to be made. Management continues to monitor water levels closely and to consider medium to long-term mitigation strategies to manage water levels and quality.
10. Climate Change Risk appetite: High Risk Rating: Medium Nature of risk: Long term No Change – In May 2024, Petra announced its entry into long term power purchase agreements that secure the supply of wheeled renewable energy for its SA operations, enabling Petra to meet its interim target of reducing Scope 1 and 2 GHG emissions by 35
-40% by 2030 (against Petra’s 2019 baseline) ahead of time. Renewable energy is expected to be supplied under such agreements from FY 2026 onwards. Following the development of a Climate Scenario Analysis in FY 2023 (which was supported by Ernst & Young),
management has updated its climate change risk assessment processes at each operation to identify, mitigate and manage climate change risk at a mine level and continue to integrate these risks into existing baseline risk assessments.
11. Capital Projects Risk appetite: Medium Risk Rating: High Nature of risk: Short to medium term Decrease – Major life extension capital projects at the Cullinan and Finsch Mines were replanned during FY 2024 and approved by the Board as part of the updated Life of Mine (LOM) plans. Following such replanning, Finsch’s 81-Level has been optimised for
early production as a mitigation to the lower carats recovered during H1 FY 2025. Handover of the first tunnel to production is forecast for February 2025, three months ahead of schedule. The 3-Level SLC project (86, 88 and 90L) development ramp-up is
ahead of schedule on total metres and critical development remains on target for the forecasted production handover on 86L. Focus on the critical path will need to be maintained to ensure the LOM production ramp-up on the 86L-90L SLC is achieved. At
Cullinan Mine, good progress continued on the CC1E development project, with first contribution of higher-grade ore taking place in Q2 FY 2025. This project has so far sustained the required development rates, is expected to ramp-up over the next 16-18
months and remains on target for the planned production handover. Capital costs for the extension projects at both the Cullinan and Finsch Mines are tracking slightly below budget resulting from improved development efficiencies. A capital optimisation
review of such extension projects has been commenced as part of the multi-stream Restructuring Plan mentioned above (see Group Liquidity risk), with specific focus on early production at 81-level for Finsch.
12. Supply Chain Risk appetite: Medium Risk Rating: High Nature of risk: Short to medium term No Change – A supply chain integrated solution project is being implemented to enhance and improve shortcomings identified during a gap analysis of existing supply chain processes and systems that was conducted by an independent external expert in FY 2023.
The project will address key areas including: (i) supplier portal, (ii) ‘source to contract’ and ‘procure to pay’ services, (iii) inventory management, (iv) contract lifecycle management, (v) risk management and (vi) master data governance.
13. Refinancing Risk appetite: Low Risk Rating: Severe Nature of risk: Short to medium term N/A –Petra’s ability to refinance the full outstanding 2L Notes due in March 2026 and the drawn down Revolving Credit Facility has been introduced as a new principal risk due to the proximity of the maturity dates. The Group remains confident in its
ability to refinance its debt on the back of the underlying operational cashflow generation, as well as strong net cashflow generation anticipated from FY 2027 onwards, as the Group sees the benefit of an increase in carats recovered from higher-grade
areas that are currently in development, both at Cullinan Mine and Finsch. In addition, Petra has initiated a multi-stream Restructuring Plan to improve cash generation by means of cost reductions, capital optimisation as well as implementing additional
revenue generation initiatives. The outcome of a refinancing, however, remains outside of the Group’s control. If the Group is unable to successfully refinance the existing debt on account of the willingness of existing Noteholders and/or the terms and
conditions of such a refinance or new debt instruments, the Group would consider whether other options are available such as an equity raise or asset sales in order to settle its obligations. As described in the ‘Basis of preparation including going
concern’ in the Financial Statements, certain factors (including relating to the Rough Diamond Prices risk above and this Refinancing risk) indicate the existence of material uncertainties which may cast significant doubt on the Group’s ability to continue
as a going concern.
PETRA DIAMONDS LIMITED
CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT
FOR THE 6 MONTH PERIOD ENDED 31 DECEMBER 2024
US$ million Notes (Unaudited) 1 July 2024- 31 December 2024 Re-presented 1,2 (Unaudited) 1 July 2023- 31 December 2023 Re-presented 1 (Unaudited) Year ended 30 June 2024
Revenue 115 164 310
Mining and processing costs (131) (159) (314)
Other direct mining income 1 1 2
Corporate expenditure including settlement costs (6) (8) (13)
Other corporate income 1 — —
Impairment charge of non-financial assets 5 (48) — (78)
Impairment charge of other receivables (5) — (4)
Total net operating costs (188) (166) (407)
Operating loss 1 (73) (2) (97)
Financial income 6 9 10 21
Financial expense 6 (33) (19) (40)
Gain on extinguishment of Notes net of unamortised costs 6 5 — 1
Loss before tax (92) (11) (115)
Income tax credit 19 5 33
Loss for the period from continuing operations (73) (6) (82)
Profit / (loss) on discontinued operations including associated impairment charges (net of tax) 12 4 (5) (25)
Loss for the Period (69) (11) (107)
Attributable to:
Equity holders of the parent company (55) (9) (86)
Non-controlling interest (14) (2) (21)
(69) (11) (107)
Loss per share attributable to the equity holders of the parent during the Period:
Basic (loss)/profit per share from continuing and discontinued operations: (28) (5) (44)
- continuing operations – US cents 3 10 (30) (2) (31)
- discontinued operations – US cents 3 10 2 (3) (13)
Diluted (loss)/profit per share from continuing and discontinued operations: (28) (5) (44)
- continuing operations – US cents 4 10 (30) (2) (31)
- discontinued operations – US cents 4 10 2 (3) (13)
(1) The comparative periods for the six months ended 31 December 2023 and the
12 months ended 30 June 2024 have been re-presented in accordance with IFRS 5,
refer to note 12.
(2) The comparative period for 31 December 2023 has been restated to add the
subtotal “Operating loss” to improve disclosure.
(3) Calculated on the basic weighted average number of ordinary shares
(4) Calculated on the diluted weighted average number of ordinary shares
PETRA DIAMONDS LIMITED
CONDENSED CONSOLIDATED INTERIM STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE 6 MONTH PERIOD ENDED 31 DECEMBER 2024
US$ million (Unaudited) 1 July 2024- 31 December 2024 Re-presented 1 (Unaudited) 1 July 2023- 31 December 2023 Re-presented 1 (Unaudited) Year ended 30 June 2024
Loss for the Period (69) (11) (107)
Other comprehensive (loss)/profit that will be reclassified to the Consolidated Income Statement in subsequent periods:
Exchange differences on translation of foreign operations 2 (8) 6 8
Exchange differences on translation of foreign operations recycled to profit and loss (31) — —
Total comprehensive loss for the Period, net of tax (108) (5) (99)
Total comprehensive loss attributable to:
Equity holders of the parent company (92) (3) (78)
Non-controlling interest (16) (2) (21)
(108) (5) (99)
(1) The comparative period for the six months ended 31 December 2023 and the
12 months ended 30 June 2024 have been re-presented in accordance with IFRS 5,
refer to note 12.
(2) Exchange differences arising on translation of foreign operations and
non-controlling interest will be reclassified to profit and loss if specific
future conditions are met.
PETRA DIAMONDS LIMITED
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
US$ million Notes (Unaudited) 31 December 2024 (Audited) 30 June 2024
ASSETS
Non-current assets
Property, plant and equipment 5 438 532
Right-of-use assets 2 22
BEE loans and receivables 38 42
Other receivables 1 10
Total non-current assets 479 606
Current assets
Trade and other receivables 6 68
Inventories 41 55
Other financial asset — 14
Cash and cash equivalents (including restricted amounts) 51 29
Total current assets 98 166
Assets classified as held for sale 12 81 —
Total assets 658 772
EQUITY AND LIABILITIES
Equity
Share capital 146 146
Share premium account 609 609
Foreign currency translation reserve (528) (491)
Share-based payment reserve 4 3
Accumulated reserves (78) (23)
Attributable to equity holders of the parent company 153 244
Non-controlling interest (1) (27)
Total equity 152 217
Liabilities
Non-current liabilities
Loans and borrowings 7 — 246
Provisions 62 112
Lease liabilities 2 21
Deferred tax liabilities 26 50
Total non-current liabilities 90 429
Current liabilities
Loans and borrowings 7 267 25
Lease liabilities — 4
Trade and other payables 47 81
Bank overdraft — 8
Provisions 2 8
Total current liabilities 316 126
Liabilities held for sale 12 100 —
Total liabilities 506 555
Total equity and liabilities 658 772
PETRA DIAMONDS LIMITED
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASHFLOWS
FOR THE 6 MONTH PERIOD ENDED 31 DECEMBER 2024
US$ million Notes (Unaudited) 1 July 2024- 31 December 2024 Restated 1,2 (Unaudited) 1 July 2023- 31 December 2023 Re-presented 1 (Unaudited) Year ended 30 June 2024
Cash generated from operations 11 55 34 67
Net realised gains on foreign exchange contracts 5 3 5
Finance expenses paid (15) (15) (30)
Net cash generated from operating activities 45 22 42
Cash flows from investing activities
Additions to property, plant and equipment (39) (56) (84)
Proceeds from sale of property, plant and equipment — 1 1
Other financial assets 4 14 — (14)
Interest received 1 3 4
Net cash utilised in investing activities (24) (52) (93)
Cash flows from financing activities
Lease instalments paid (3) (3) (6)
Repayment of borrowings 7 (19) — (4)
Repayment of Revolving Credit Facility (36) — (21)
Draw-down on Revolving Credit Facility 7 56 46 45
Net dividend paid to BEE partners — (2) (2)
Net cash (utilised in)/generated from financing activities (2) 41 12
Net increase/(decrease) in cash and cash equivalents 19 11 (39)
Cash and cash equivalents at beginning of the Period 2 21 58 58
Effect of exchange rate fluctuations on cash held 1 2 2
Cash and cash equivalents (net of bank overdraft) at end of the Period 2,3 41 71 21
(1) The Consolidated Statement of Cashflows for the comparative periods have
been re-presented with the operating results of Williamson which has been
classified as a discontinued operation during H1 FY 2025; for further detail
refer to note 12.
(2) Historically, the Group did not include restricted cash balances held
within its cell captive as cash and cash equivalents in the consolidated
statement of cashflows. Following a review during FY 2024, Management
concluded that these balances should be included in cash and cash equivalents
in the Consolidated Statement of Cashflows in accordance with IAS 7. As a
result, the comparatives on the Consolidated Statement of Cashflows for the
period ended 31 December 2023 have been restated to correctly include brought
forward restricted cash balances, carried forward restricted cash balances,
and movements in restricted cash within cash generated from operations for the
6 months to 31 December 2023.
(3) The cash and cash equivalents in the Consolidated Statement of Cashflows
are net of overdraft balances at Williamson. At 31 December 2024, the drawdown
on the overdraft facility amounted to US$10 million (30 June 2024: US$8
million; 31 December 2023: US$10 million). The overdraft balance of US$10
million at 31 December 2024 has been disclosed within the liabilities held for
sale. Refer to note 12.
(4) The assets relating to funding for environmental rehabilitation was
reported as other financial assets at 30 June 2024. This was re-invested as
cash and cash equivalents during the Period.
PETRA DIAMONDS LIMITED
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
FOR THE 6 MONTH PERIOD ENDED 31 DECEMBER 2024
(Unaudited) US$ million Share capital Share premium account Foreign currency translation reserve Share-based payment reserve Other reserves Accumulated reserves / (losses) Attributable to the parent Non-controlling interest Total equity
Six month Period ended 31 December 2024:
At 1 July 2024 146 609 (491) 3 — (23) 244 (27) 217
Loss for the Period — — — — — (55) (55) (14) (69)
Other comprehensive loss — — (6) — — — (6) (2) (8)
Recycling of foreign currency translation reserve on disposal of Koffiefontein 1 — — (31) — — — (31) — (31)
Non-controlling interest disposed 1 — — — — — — — 42 42
Equity settled share based payments — — — 1 — — 1 — 1
At 31 December 2024 146 609 (528) 4 — (78) 153 (1) 152
(1)Refer to note 12
(Unaudited) US$ million Share capital Share premium account Foreign currency translation reserve Share-based payment reserve Other reserves Accumulated reserves / (losses) Attributable to the parent Non-controlling interest Total equity
Six month Period ended 31 December 2023:
At 1 July 2023 146 609 (499) 4 (1) 62 321 (4) 317
Loss for the Period — — — — — (9) (9) (2) (11)
Other comprehensive income — — 6 — — — 6 — 6
Dividend paid to Non-controlling interest shareholders — — — — — — — (3) (3)
Equity settled share based payments — — — 1 — — 1 — 1
At 31 December 2023 146 609 (493) 5 (1) 53 319 (9) 310
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE 6 MONTH PERIOD ENDED 31 DECEMBER 2024
1. GENERAL INFORMATION
Petra Diamonds Limited (the “Company”), a limited liability company listed
on the Main Market of the London Stock Exchange (“LSE”), is registered in
Bermuda and domiciled in the United Kingdom. The condensed consolidated
interim financial statements of the Company for the six-month period ended 31
December 2024 comprise the Company and its subsidiaries (together referred to
as the “Group”).
1. BASIS OF PREPARATION
The condensed consolidated interim financial statements in this report have
been prepared in accordance with the historic cost convention except for
certain financial instruments which are stated at fair value and disposal
groups which are stated at the lower of their carrying value and fair value
less cost to sell. The Group prepares condensed consolidated interim financial
statements for the six months ended 31 December (the “Period”), and annual
financial statements for the year ended 30 June. The Group’s accounting
policies used in the preparation of these condensed consolidated interim
financial statements are consistent with those used in the annual financial
statements for the year ended 30 June 2024.
The condensed consolidated interim financial statements of the Company have
been prepared in compliance with the framework concepts and the measurement
and recognition requirements of the International Financial Reporting
Standards adopted by the European Union (“IFRSs”), IAS 34 Interim
Financial Reporting as issued by the International Accounting Standards Board
(“IASB”), the Disclosure and Transparency Rules of the Financial Conduct
Authority in the United Kingdom as applicable to interim financial reporting
and in the manner required by the Bermudan Companies Act, 1981 for the
preparation of financial information of the group for the six months ended 31
December 2024. These condensed consolidated interim financial statements
should be read in conjunction with the Company’s audited consolidated
financial statements and the notes as at and for the year ended 30 June 2024.
In order to align with IAS 34, the comparative balances as at 31 December
2023, have not been presented on the Balance Sheet.
Going concern
Since 30 June 2024, the Group drew US$18 million on its Revolving Credit
Facility (RCF) from Absa Bank purchased and cancelled the 2L Notes with a
nominal value of US$24 million through an open market repurchase programme.
The consolidated net debt increased by US$22 million, closing at US$215
million on 31 December 2024. Discussions with lenders regarding the
refinancing of the RCF and the 2L Notes are ongoing. These facilities mature
in January 2026 and March 2026 respectively, and the Group’s going concern
assessment hinges primarily on the ability to refinance them prior to this
maturity date. The Board is actively pursuing and exploring various
refinancing options, recognising that this represents a principal risk to the
Group’s liquidity and overall financial stability if not concluded
successfully.
As at 31 December 2024, the Group's Net Debt:Adjusted EBITDA ratio was 4.45
times, exceeding the maximum RCF covenant of 3.25 times, and its interest
cover ratio was 1.74 times, below the RCF’s minimum covenant of 2.75 times.
When Petra publishes these interim results it is required to submit a
certificate to Absa Bank that it is in compliance with such covenants. The
reported information in these interim results would result in a breach of the
RCF covenants. Management, therefore, approached Absa Bank after the Period
end to seek a waiver of these covenant breaches to prevent the occurrence of
an event of default under the RCF and Absa Bank has provided such waiver. The
waiver is applicable only to December 2024 covenant measurements (refer to
note 7).
While the covenant breaches would have only occurred after the end of the
reporting interim period, Petra’s right to defer the repayment of the RCF
and 2L Notes for a period exceeding 12 months from the reporting period was
conditional upon receiving the covenant waiver from Absa Bank which Petra
received after the reporting period ended. As a result of this condition
existing at the end of the reporting period, both the RCF and 2L Notes are
classified as current liabilities.
The Group continues to monitor the RCF covenants through to maturity of the
facilities, although they remain highly sensitive to fluctuations in
production, product prices, product mix, and exchange rates. This leads to
continued uncertainty and risk around future covenant breaches and potential
events of default.
The diamond market continues to face significant uncertainties. At the same
time, consumer demand for Laboratory/lab-grown diamond LGDs has surged, with
industry unit sales rising year-on-year in 2024. Still, falling prices have
squeezed retailer margins and tempered enthusiasm for promoting synthetics
over natural diamonds. Independent jewellers, more agile in adjusting
inventories, reported sales growth in December, suggesting the potential for
sector-specific resilience. Meanwhile, the rough market is hampered by
sluggish demand in China, limited holiday sales in the U.S., and downward
price pressure. Polishing centres, notably in Surat, operate well below
capacity, some shifting to synthetic processing to manage downturns in rough
demand. Though certain luxury segments remain robust and mid-January jewellery
shows pockets of optimism, broader mid-market constraints, margin pressures,
and selective rough buying underscore the volatility that may affect the
Group’s near-term cash flows and liquidity. Taken together, these conditions
increase the risk of price and volume fluctuations, which could adversely
impact the Group’s ability to meet its obligations under various debt
arrangements, thereby directly affecting the Group’s ability to successfully
refinance its facilities and influencing the Group’s going concern
assessment.
Total diamond production for the Period (including Williamson) marginally
decreased 2% from 1.43Mcts in H1 FY 2024 to 1.40Mcts in H1 FY 2025, but tonnes
treated increased 7% in H1 FY 2025 compared to the same period last year.
Cullinan Mine continued to perform well on the back of a modest improvement in
tonnes treated, good dilution control in the C-Cut and higher CC1E grades
coming through. The lack of gem-quality stones seen in December 2024 and
January 2025, has since started to improve.
Finsch saw a reduction in tonnes treated and carats produced compared to H1 FY
2024, largely due to the transition from continuous operations to a two-shift
configuration during the first quarter of FY 2025, with output improving
through the Period as the new shift pattern was successfully introduced and
mining moved into fresher ore associated with the 78-Level Phase II. With
mining having transitioned into the 78-Level Phase II section of the orebody,
a more predictable operating performance is expected.
Williamson continued to perform well, with production increasing from a year
ago on the back of higher tonnes treated.
The Board has examined the Group’s cash flow forecasts extending to March
2026 (i.e., 12 months beyond the interim reporting date), reflecting revised
production levels, updated diamond pricing assumptions, and the cost-saving
measures implemented. Under these base-case forecasts, the Group expects to
retain sufficient liquidity over the going concern period, having successfully
obtained a covenant waiver from Absa Bank (as explained above) contingent on
successfully refinancing the RCF and 2L Notes prior to maturity. However, this
is not guaranteed.
The Board recognises the risks associated with persisting market volatility,
which may lead to lower diamond prices for longer, and increased uncertainty
and risk around future covenant breaches and potential events of default,
impacting the risk of refinancing the Group’s 2L Notes and Revolving Credit
Facility, given these remain outside of the Group’s control.
The Group is dependent on refinancing the Group’s 2L Notes and Revolving
Credit facility, both of which are not guaranteed. These factors indicate that
a material uncertainty exists, which may cast significant doubt on the
Group’s ability to continue as a going concern. Therefore, the Group may be
unable to realise its assets and discharge its liabilities in the normal
course of business.
Based on its assessment of the forecasts, principal risks and uncertainties
and mitigation actions considered available to the Group, including steps
already undertaken or being executed by management to improve liquidity
(including cost reductions and capital rationalisation), operational
performance, and Absa Bank’s covenant waiver (as explained above), the Board
has a reasonable expectation that the Group will remain a going concern for a
period of at least 12 months from the date of approval of the interim
condensed financial statements and have therefore prepared the interim
condensed financial statements on a going concern basis.
The Interim Condensed Financial Statements do not include any adjustments that
would result from the basis of preparation being inappropriate.
Significant assumptions and judgements:
The preparation of the condensed consolidated interim financial statements
requires management to make estimates and judgements and form assumptions that
affect the reported amounts of the assets and liabilities, reported revenue
and costs during the periods presented therein, and the disclosure of
contingent liabilities at the date of the interim financial statements.
Estimates and judgements are continually evaluated and based on management’s
historical experience and other factors, including future expectations and
events that are believed to be reasonable. The estimates and assumptions that
have a significant risk of causing a material adjustment to the financial
results of the Group in future reporting periods have been disclosed in the
Group’s annual financial statements for the year ended 30 June 2024. Except
as disclosed under property, plant and equipment, there have been no material
changes to the significant assumptions and judgements in the 6-month period
ended 31 December 2024.
Revenue
The Group has entered into a partnership revenue contract to cut and polish a
specific rough diamond. An estimate of the variable revenue of the onward sale
of the polished diamonds will be recognised based on the probability of the
sale of the resulting cut and polished diamonds.
The transaction price of the US$2.8m variable revenue for the rough diamond
has been recognised in profit and loss at 31 December 2024. The unenhanced
stone value is based on the agreed value at transaction date. The probability
of revenue reversal is highly unlikely for the rough diamond. The estimated
“uplift” revenue is US$300,000. At 31 December 2024, no GIA certificate
has been received, and no variable revenue has been recognised for the uplift
revenue.
The uplift revenue is expected to be earned during the next 12 months and will
be settled in cash.
BEE receivables – expected credit loss provision
The Group has applied the expected credit loss impairment model to its BEE
loans receivable. In determining the extent to which expected credit losses
may apply, the Group assessed the future free cashflows to be generated by the
mining operations, based on the current mine plans. In assessing the future
cashflows, the Group considered the diamond price outlook and the probability
of reaching an offset agreement. Based on the assessment, an expected credit
loss charge amounting to US$5 million was recognised at 31 December 2024. The
net BEE receivables balance included in the Consolidated Statement of
financial position at Period end amounted to US$38 million (30 June 2024:
US$42 million).
Labour Restructure Costs
Provisions are recognised when the Group has a present legal or constructive
obligation as a result of past events, for which it is probable that an
outflow of economic benefits will occur and where a reliable estimate can be
made of the amount of the obligation. Where the effect of discounting is
material, provisions are discounted.
During H1 FY 2025, the Company initiated a section 189 (retrenchment) process
affecting the Group’s and South African operations support functions.
Management’s assessment resulted in estimated aggregate cost of
restructuring of US$2 million and provided for the amount at 31 December 2024.
The labour restructure is expected to be concluded during H2 FY 2025.
Significant judgements and estimates relevant to assets held for sale
The Group applies judgement when determining whether an asset should be
classified as held for sale. For this to be the case, the asset must be
available for immediate sale in its present condition and its sale must be
highly probable. The following factors were considered by Management in
determining whether a sale is highly probable: Management must be committed to
a plan to sell the asset; an active programme to locate a buyer and complete
the plan must have been initiated; the asset must be actively marketed for
sale at a reasonable price; and any transaction should be expected to be
completed within 12 months of classification of the asset as held for sale.
Judgement was required when determining whether a component of an entity
classifies as a discontinued operation. Judgements required include
determining whether the component represents a separate major line of business
or geographical area of operation. This was applied to the classification of
the Williamson mine as a discontinued operation. The Williamson mine is
considered a major geographical area of operation which has been reported as a
separate segment in the past, and as such Management determined the
classification of a discontinued operation to be appropriate. In terms of the
measurement requirements of IFRS 5, once classified as held for sale, the
assets are required to be measured at the lower of their carrying amount and
fair value less costs to sell. Judgement was required in order to determine
the fair value of the disposal group. In determining the fair value used to
calculate the appropriate write-down, Management took into consideration its
discussions with the purchaser, the latest Life-of-Mine plan assessment and
the best available information at the time.
The Williamson mine was impaired in previous years. In light of the intended
sale of the mine and immediately prior to the reclassification of the mine to
assets held for sale, management have considered if there are any indicators
that the previous impairment should be reversed. In undertaking this
assessment management have considered the anticipated sales price for the
Williamson disposal group at the time of reclassification to held for sale and
while this was expected to be higher than the net liabilities to be disposed
of management have concluded that this does not provide an indicator of
impairment reversal when considering the other assets and liabilities in the
disposal group including potential goodwill. In reaching this judgement
management also considered a) whether any changes to the inputs into the
previous value in use calculation would imply an impairment or reversal of
impairment and concluded they would not have, and b) how a buyer would
determine the value for the standalone mine asset in an arm's length
transaction, and concluded that this would likely be based on value in use.
Taking these factors together, management concluded there was no indicator
that the previous impairment should be reversed.
Human rights settlement claims
The Independent Grievance Mechanism (IGM) is a non-judicial process that has
the capacity to investigate and resolve complaints alleging severe human
rights impacts in connection with security operations at the Williamson
diamond mine. It is being overseen by an Independent Panel of Tanzanian
experts taking an approach informed by principles of Tanzanian law, and with
complainants having access to free and independent advice from local lawyers.
The overall aim of the IGM is to promote reconciliation between the Williamson
diamond mine, directly affected parties and the broader community by providing
remedy to those individuals who have suffered severe human rights impacts.
Petra Diamonds Limited (Petra) has agreed to fund the remedies determined by
the IGM.
On 28 November 2022, the IGM became operational with the commencement of the
IGM’s pilot phase. The pilot phase, which was completed in May 2023, has
allowed the IGM’s systems and procedures to be further developed and
adjusted to take into account learnings. Since the Pilot Phase, the
Independent Panel (IP) has been making decisions on the merits of cases and
the associated remedies for successful grievances. Registration of new
grievances closed on 31 January 2024 and first remedy payments to claimants
were made on 14 June 2024.
Judgement has been applied by Management in assessing the estimated future
cost of remedies for successful grievances based on the outcome of claims
investigated up to the end of the Period. Management has assessed the results
of these investigated claims and performed its own estimate based on
calculations received from consultants. The estimate makes a number of
different assumptions, including, amongst others, the categories of the
grievances, the number of non-returning claimants, the success rates of the
grievances and the remedies that have been paid to successful complainants.
These estimates also do not make any allowance for non-financial remedies that
the IP may award. The outcome of the concluded cases, spread across all
categories, have been extrapolated across the grievance population, based on
the average claim settlement per category and the various categories of the
grievances (nature of claims). Management’s assessment resulted in estimated
aggregate costs of US$6 million at 31 December 2024 (30 June 2024: US$8
million).
3. DIVIDENDS
No dividends have been declared in respect of the current Period under review
(30 June 2024: US$nil and 31 December 2023: US$nil).
4. SEGMENTAL INFORMATION
Segment information is presented in respect of the Group’s operating and
geographical segments:
* Mining – the extraction and sale of rough diamonds from mining operations
in South Africa and Tanzania.
* Corporate – administrative activities in the United Kingdom.
* Beneficiation – beneficiation activities in South Africa.
Segments are based on the Group’s management and internal reporting
structure. Management reviews the Group’s performance by reviewing the
results of the mining activities in South Africa, Tanzania and reviewing the
results of the corporate administration expenses in the United Kingdom. Each
segment derives, or aims to derive, its revenue from diamond mining and
diamond sales, except for the corporate and administration cost centre.
Segment results, assets and liabilities include items directly attributable to
a segment, as well as those that can be allocated on a reasonable basis.
Segment results are calculated after charging direct mining costs,
depreciation and other income and expenses. Unallocated items comprise mainly
interest-earning assets and revenue, interest-bearing borrowings and expenses
and corporate assets and expenses. Segment capital expenditure is the total
cost incurred during the Period to acquire segment assets that are expected to
be used for more than one period. Eliminations comprise transactions between
Group companies that are cancelled on consolidation. The results are not
materially affected by seasonal variations. Revenues are generated from
tenders held in South Africa and Antwerp for external customers from various
countries.
SEGMENTAL INFORMATION (continued)
Operating segments South Africa – Mining activities Tanzania -Mining activities United Kingdom South Africa
US$ million Cullinan Mine Finsch Williamson 5 Corporate and treasury Beneficiation 4 Inter-segment Consolidated
(6 month period ended 31 December 2024) 1 July 2024 - 31 December 2024 1 July 2024 - 31 December 2024 1 July 2024 - 31 December 2024 1 July 2024 - 31 December 2024 1 July 2024 - 31 December 2024 1 July 2024 - 31 December 2024 1 July 2024 - 31 December 2024
Revenue 1 78 37 — — — — 115
Segment result 2 8 (21) — (7) — — (20)
Impairment charge – operations — (48) — — — — (48)
Impairment charge – other receivables — — — (5) — — (5)
Operating profit / (loss) 3 8 (69) — (12) — — (73)
Financial income 9
Financial expense (33)
Gain on extinguishment of Notes net of unamortised costs 5
Income tax credit 19
Profit on discontinued operation including associated impairment charges (net of tax) 5,6 4
Non-controlling interest 14
Loss attributable to equity holders of the parent company (55)
Segment assets 7 354 122 79 3,087 4 (2,988) 658
Segment liabilities 7 319 127 116 1,983 5 (2,044) 506
Capital expenditure 17 13 6 1 — — 37
(1)The Group’s revenue of US$115 million comprises the sale of rough
diamonds and polished stones.
(2)Total depreciation of US$33 million included in the segmental result
comprises depreciation incurred at the Cullinan Mine of US$19 million, Finsch
mine of US$14 million and Corporate and treasury of US$nil.
(3)Operating loss is equivalent to revenue of US$115 million less total costs
of US$188 million as disclosed in the Consolidated Income Statement.
(4)The beneficiation segment represents Tarorite, a cutting and polishing
business in South Africa, which can on occasion cut and polish select rough
diamonds.
(5)The operating results in respect of Koffiefontein and Williamson have been
presented within loss on discontinued operations (refer to note 12).
(6)Koffiefontein was disposed of during H1 FY 2025 (refer to note 12). The
profit on disposal of US$15 million is disclosed as part of the profits on
discontinued operation in the Consolidated Income Statement.
(7)Segment assets and liabilities include inter-company receivables and
payables which are eliminated on consolidation
4. SEGMENTAL INFORMATION (continued)
Operating segments South Africa – Mining activities Tanzania -Mining activities United Kingdom South Africa
US$ million (Restated) 6 Cullinan Mine Finsch Koffiefontein 5 Williamson 5,6 Corporate and treasury Beneficiation 4 Inter-segment Consolidated
(6 month period ended 31 December 2023) 1 July 2023 - 31 December 2023 1 July 2023 - 31 December 2023 1 July 2023 - 31 December 2023 1 July 2023 - 31 December 2023 1 July 2023 - 31 December 2023 1 July 2023 - 31 December 2023 1 July 2023 - 31 December 2023 1 July 2023 - 31 December 2023
Revenue 1 97 67 — — — — — 164
Segment result 2 12 (7) — — (8) — — (3)
Other direct income 1 — — — — — — 1
Operating profit / (loss) 3 13 (7) — — (8) — — (2)
Financial income 10
Financial expense (19)
Income tax credit 5
Loss on discontinued operations including associated impairment charges (net of tax) 5 (5)
Non-controlling interest 2
Loss attributable to equity holders of the parent company (9)
Segment assets 7 427 246 1 84 3,140 6 (3,009) 895
Segment liabilities 7 351 148 53 84 2,047 6 (2,105) 584
Capital expenditure 27 16 — 7 1 — — 51
(1)The Group’s revenue of US$164 million comprises the sale of rough
diamonds and polished stones.
(2)Total depreciation of US$38 million included in the segmental result
comprises depreciation incurred at the Cullinan Mine US$23 million, Finsch
US$15 million and Corporate and treasury US$nil.
(3)Operating loss is equivalent to revenue of US$164 million less total costs
of US$166 million as disclosed in the Consolidated Income Statement.
(4)The beneficiation segment represents Tarorite, a cutting and polishing
business in South Africa, which can on occasion cut and polish select rough
diamonds.
(5)The operating results in respect of Koffiefontein and Williamson have been
presented within loss on discontinued operations (refer to note 12).
(6)Williamson met the criteria of a disposal group held for sale in terms of
IFRS 5. The comparative results for the 6 months ended 31 December 2023 has
been restated to present Williamson’s results as part of the Group’s loss
on discontinued operations in the Consolidated Income Statement.
(7) Segment assets and liabilities include inter-company receivables and
payables which are eliminated on consolidation
4. SEGMENTAL INFORMATION (continued)
Operating segments South Africa – Mining activities Tanzania -Mining activities United Kingdom South Africa
US$ million (Restated) 6 Cullinan Mine Finsch Koffiefontein 5 Williamson 5,6 Corporate and treasury Beneficiation 4 Inter-segment Consolidated
(12 month period ended 30 June 2024) 2024 2024 2024 2024 2024 2024 2024 2024
Revenue 1 190 120 — — — — — 310
Segment result 2 21 (23) — — (14) — (1) (17)
Impairment (charge)/reversal – property, plant and equipment and other receivables (33) (45) — — (3) (1) — (82)
Other direct income 1 1 — — — — 2
Operating loss 3 (11) (67) — — (17) (1) (1) (97)
Financial income 19
Financial expense (38)
Gain on extinguishment of Notes net of unamortised costs 1
Income tax credit 33
Loss on discontinued operation including associated impairment charges (net of tax) 5 (25)
Non-controlling interest 21
Loss attributable to equity holders of the parent company (86)
Segment assets 7 395 199 1 87 3,159 5 (3,074) 772
Segment liabilities 7 349 152 57 114 2,049 7 (2,173) 555
Capital expenditure 48 25 — 10 1 — — 84
(1) The Group’s revenue of US$310 million comprises the sale of rough
diamonds and polished stones.
(2)Total depreciation of US$77 million included in the segmental result
comprises depreciation incurred at the Cullinan mine of US$46 million, Finsch
mine of US$30 million and Corporate and treasury of US$1 million
(3)Operating loss is equivalent to revenue of US$310 million less total costs
of US$407 million as disclosed in the Consolidated Income Statement.
(4)The beneficiation segment represents Tarorite, a cutting and polishing
business in South Africa, which can on occasion cut and polish select rough
diamonds
(5)The operating results in respect of Koffiefontein and Williamson have been
presented within loss on discontinued operations (refer to note 12).
(6)Williamson met the criteria of a disposal group held for sale in terms of
IFRS 5. The comparative results for the 12 months ended 30 June 2024 has been
restated to present Williamson’s results as part of the Group’s loss on
discontinued operations in the Consolidated Income Statement.
(7)Segment assets and liabilities include inter-company receivables and
payables which are eliminated on consolidation
5. PROPERTY, PLANT AND EQUIPMENT
The net movement in property, plant and equipment for the Period is a decrease
of US$94 million (30 June 2024: US$66 million decrease and 31 December 2023
US$26 million increase). This is primarily as a result of:
US$ million 1 July 2024 - 31 December 2024 1 July 2023 30 June
2024
As at 1 July 532 598
Additions 37 84
Disposals — (4)
Depreciation (33) (76)
Impairments (48) (78)
Discontinued operations (8) (14)
Mining equipment transferred to Assets Held for sale (refer to note 12(a)(i)) (26) —
Foreign exchange movement (16) 22
As at Period end 438 532
Group impairment assumptions for 31 December 2024 and 30 June 2024
At 30 June 2024 the Group reviewed the carrying value of its operational
assets for indicators of impairment and accounted for specific impairment
provisions and reversals. The assumptions in exercising its judgement related
to future exchange rates, rough diamond prices, contribution from Exceptional
Diamonds, volumes of production, ore reserves and resources included in the
current mine plans, feasibility studies, future development and production
costs and macroeconomic factors such as inflation and discount rates. Refer to
the annual financial statements for the year ended 30 June 2024 for details of
the key inputs and sensitivities.
For the six months ended 31 December 2024 the assumptions remained materially
unchanged, except for the items below which, together with the production
performance at Finsch during H1 FY 2025, resulted in an impairment charge of
US$48 million being recognised at Finsch.
Key assumptions Explanation
Current mine plan and recoverable value of reserves and resources Economically recoverable reserves and resources are based on Management’s expectations based on the availability of reserves and resources at mine sites and technical studies undertaken in house and by third party specialists. The reserves, which informed
the current Board-approved mine plans for the operations, are unchanged other than factoring in changes to the timing of mining activities at Finsch as it transitions away from mature parts of the orebody to newly commissioned areas. Management prepared
best-estimate mine plans, based on their expectations, current information and projections, to inform revised production, capital and operating expenditure profiles for mine plans for these interim results. It is expected that the FY 2025 year-end reviews
will be based on Board-approved plans, following the finalisation of the replanning work during H2 FY 2025.
Diamond prices The diamond prices used in the impairment test have been set with reference to recently achieved pricing and market trends, and long-term diamond price escalators are informed by industry views of long-term market supply/demand fundamentals. Given the
current market uncertainty, the assessment of short-term diamond prices and the rate and extent of pricing recovery, together with the longer-term pricing escalators, represented a critical judgement. The diamond price assumption for Finsch has been
adjusted downward, in line with latest pricing assumptions shared by management. Some recovery is assumed as product mix is expected to improve as production at 78L transitions to fresher ore at 81L, with the 3L SLC project expected to contribute from FY
2026 onwards.
The 31 December 2024 impairment testing models’ starting price assumptions have been adjusted to reflect the pricing achieved during the six months ended 31 December 2024. The long-term models incorporate normalised real diamond price growth of 1.88% per
annum (3.88% nominal) (30 June 2024: 1.88% above a long-term US inflation rate).
6. NET FINANCE EXPENSE
US$ million 1 July 2024 - 31 December 2024 Re-presented 1 1 July 2023 - 31 December 2023 Re-presented 1 1 July 2023 - 30 June
2024
Interest received on loans and other receivables 3 3 6
Interest received on bank deposits 1 3 3
Foreign exchange gains realised on settlement of forward exchange contracts 5 3 5
Net unrealised foreign exchange profits — 1 7
Finance income 9 10 21
Gross interest on senior secured second lien notes and bank loans (18) (17) (33)
Other debt finance costs, including loan interest, facility fees and charges (1) (1) (2)
Unwinding of rehabilitation obligations (1) (1) (5)
Note redemption premium and acceleration of unamortised bank facility and Notes costs (1) — —
Net unrealised foreign exchange losses (12) — —
Finance expense (33) (19) (40)
Gain on extinguishment of Notes 1 5 — 1
Net finance expense (19) (9) (18)
(1) During H1 FY 2025, the Company repurchased and cancelled US$24 million of
2L Notes with a nominal value of US$24 million (30 June 2024: US$5 million)
for a cash consideration of US$19 million (30 June 2024: US$4 million) through
an open market repurchase programme.
7. LOANS AND BORROWINGS
US$ million 31 December 2024 30 June 2024
Non-current liabilities
Senior secured second lien notes — 221
Senior secured lender debt facilities 1 — 25
— 246
Current liabilities
Senior secured second lien notes 224 25
Senior secured lender debt facilities 1 43 —
Total loans and borrowings 267 271
(1)At Period End, an amount of ZAR945 million (US$50 million) remained
available for draw-down on the RCF, following drawdowns totalling ZAR1,005
billion (US$56 million) and repayments of ZAR650 million (US$36 million)
during H1 FY 2025 for working capital requirements. The Group's debt and
hedging facilities are detailed in the table below:
Senior Lender Debt Facilities 31 December 2024 31 December 2023 30 June 2024
Facility amount Facility amount Facility amount
ZAR Debt Facilities:
ZAR Lenders RCF ZAR1.75 billion ZAR1.0 billion ZAR1.75 billion
ZAR Lenders Term loan ZAR nil ZAR nil ZAR nil
Absa/RMB – FX Hedging facilities ZAR300 million ZAR300 million ZAR300 million
Covenant ratios
As part of the RCF entered into with Absa Bank, the Company is required:
* to maintain a Net Debt : Adjusted EBITDA ratio tested semi-annually on a
rolling 12-month basis;
* to maintain an Interest Cover Ratio tested semi-annually on a rolling
12-month basis; and
* to maintain minimum 12 month forward looking liquidity requirement that
consolidated cash and cash equivalents shall not fall below US$20.0 million.
At 31 December 2024, the Group's Net Debt:Adjusted EBITDA ratio was 4.45
times, exceeding the maximum RCF covenant of 3.25 times, and its interest
cover ratio was 1.74 times, below the RCF’s minimum covenant of 2.75 times.
When Petra publishes these interim results it is required to submit a
certificate to Absa Bank that it is in compliance with such covenants. The
reported information in these interim results would result in a breach of the
RCF covenants. Management, therefore, approached Absa Bank after the Period
end to seek a waiver of these covenant breaches to prevent the occurrence of
an event of default under the RCF and Absa Bank has provided such waiver. The
waiver is applicable only to December 2024 covenant measurements and includes
a condition that there are no further redemptions or buy-backs of the 2L Notes
to maturity of the RCF.
While the covenant breaches would have only occurred after the end of the
reporting period, Petra’s right to defer the repayment of the RCF and 2L
Notes for a period exceeding 12 months from the reporting period end was
conditional upon receiving the covenant waiver from Absa which Petra received
after the reporting period ended. As a result of this condition existing
at the end of the reporting period, both the RCF and 2L Notes are classified
as current liabilities.
The Group continues to monitor the RCF covenants through to maturity of the
facilities, although they remain highly sensitive to fluctuations in
production, product prices, product mix, and exchange rates. This increases
uncertainty and risk around future covenant breaches and potential events of
default.
8. COMMITMENTS
As at 31 December 2024, the Company had committed to future capital
expenditure totalling US$29 million (30 June 2024: US$103 million and 31
December 2023: US$43 million).
9. RELATED PARTY TRANSACTIONS
The Group’s related party BEE partners, Kago Diamonds (Pty) Ltd (“Kago
Diamonds”) and its gross interests in the mining operations of the Group are
disclosed in the table below.
Mine Partner and respective interest as at 31 December 2024 (%) Partner and respective interest as at 30 June 2024 (%)
Cullinan Kago Diamonds (14%) Kago Diamonds (14%)
Finsch Kago Diamonds (14%) Kago Diamonds (14%)
The finance income due from the related party BEE partners and dividends
paid are presented in the table below:
US$ million 31 December 2024 30 June 2024
Non-current receivable
Kago Diamonds 18 21
The finance income and finance expense, due from and due to the related party BEE partners and other related parties, including dividends paid are presented in the table below:
1 July 2024 - 31 December 2024 1 July 2023 - 31 December 2023 1 July 2023 - 30 June 2024
Finance income
Kago Diamonds 2 1 3
Dividend paid
Kago Diamonds — 1 1
Interest on the loans receivables is charged at South African JIBAR plus 5.25%
(31 December 2023: South African JIBAR plus 5.25%; 30 June 2024: South African
JIBAR plus 5.25%).
Kago Diamonds is one of the B-BBEE Partners which obtained bank financing from
the B-BBEE Lenders to acquire its interests in
Cullinan Mine and Finsch.
Key management personnel
Key management is considered to be the Non-Executive Directors, the Executive
Directors and the Executive Committee (Exco).
The Exco comprises the Chief Financial Officer (from 1 October 2024), the
Operations Executive Finsch Mine, Operations Executive Cullinan Mine, Chief
Restructuring Officer, the Group HR and Public Affairs Executive, the Group
General Counsel and Company Secretary and the Sales and Marketing Executive.
Remuneration for the Period for key management is disclosed in the table
below:
US$ million 1 July 2024 – 31 December 2024 1 July 2023 – 31 December 2023 1 July 2023 – 30 June 2024
Salary and benefits 1 1 3
Annual bonus – paid in cash — 1 1
Share-based payment charge 1 1 1
2 3 5
10. LOSS PER SHARE
Continuing operations 1 July 2024 - 31 December 2024 Discontinued operation 1 July 2024 - 31 December 2024 Total 1 July 2024 - 31 December 2024 Continuing operations 1 July 2023 - 31 December 2023 Discontinued operation 1 July 2023 - 31 December 2023 Total 1 July 2023 - 31 December 2023 Continuing operations 1 July 2023 - 30 June 2024 Discontinued operation 1 July 2023 - 30 June 2024 Total 1 July 2023 - 30 June 2024
Numerator US$ million US$ million US$ million US$ million US$ million US$ million US$ million US$ million US$ million
Loss profit for the Period (59) 4 (55) (4) (5) (9) (61) (25) (86)
Denominator Shares Shares Shares Shares Shares Shares Shares Shares Shares
Weighted average number of ordinary shares used in basic EPS
Brought forward 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785
Carried forward 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785
Shares Shares Shares Shares Shares Shares Shares Shares Shares
Dilutive effect of potential ordinary shares — — — — — — — — —
Weighted average number of ordinary shares in issue used in diluted EPS 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785 194,201,785
US cents US cents US cents US cents US cents US cents US cents US cents US cents
Basic (loss)/profit per share – US cents (30) 2 (28) (2) (3) (5) (31) (13) (44)
Diluted (loss)/profit per share – US cents (30) 2 (28) (2) (3) (5) (31) (13) (44)
The number of potentially dilutive ordinary shares, in respect of employee
share options, Executive Director and Senior Management share award schemes is
nil (30 June 2024: nil and 31 December 2023: nil).
11. NOTES TO THE CASHFLOW STATEMENT
US$ million 1 July 2024 - 31 December 2024 Restated 1 1 July 2023 - 31 December 2023 Restated 1 1 July 2023 - 30 June
2024
Loss before taxation for the year from continuing and discontinued operations (88) (16) (139)
Depreciation of property, plant and equipment 33 38 76
Net impairment charge 53 — 82
Gain on extinguishment of Notes (5) — (1)
Non-cash items relating to discontinued operations 1 6 20
Movement in provisions (3) (7) (9)
Finance income (9) (10) (21)
Finance expense 33 19 40
Other non-cash items 1 — 1
Operating profit before working capital changes 16 30 49
Decrease/(increase) in trade and other receivables 43 (1) (19)
(Decrease)/increase in trade and other payables (6) (5) 2
Decrease in inventories 2 10 35
Cash generated from operations 55 34 67
(1)The Consolidated Statement of Cashflows for the comparative periods have
been restated with the operating results of Williamson which has been
classified as a discontinued operation during H1 FY 2025; for further detail
refer to note 12.
12. ASSETS HELD FOR SALE
Profit / (loss) on discontinued operations including associated impairment
charges (net of tax) comprises:
US$ million 1 July 2024 – 31 December 2024 1 July 2023 – 31 December 2023 1 July 2023 –
30 June 2024
Williamson (refer to a(ii) below) (5) (6) (22)
Koffiefontein (refer to b(iii) below) — 1 (2)
Total (5) (5) (24)
Profit on disposal of discontinued operations and IFRS 5 remeasurement:
Williamson (refer to a(ii) below) — — —
Koffiefontein (refer to b(iii) below) 9 — (1)
Total 9 — (1)
Total per Consolidated Income Statement 4 (5) (25)
(a) Williamson
Where an operation within the Group is separately identified or forms part of
a separate reporting structure, the Group will classify the asset as held for
sale, in accordance with IFRS 5, if Management has committed to a plan to
sell, the operation is available for sale, an active search for a buyer is in
place, the disposal is highly probable within 12 months of classifying as held
for sale and completion of the disposal is unlikely to significantly change.
An impairment loss is recognised for any initial or subsequent write-down of
the asset to fair value less costs to sell. A gain is recognised for any
subsequent increases in fair value less costs to sell of an asset but not in
excess of any cumulative impairment loss previously recognised. A gain or loss
not previously recognised by the date of the sale of the non-current asset is
recognised at the date of derecognition.
Assets classified as held for sale and the assets of an operation classified
as held for sale are presented separately from the other assets in the
Consolidated Statement of Financial Position. The liabilities of an identified
operation classified as held for sale are presented separately from other
liabilities in the Consolidated Statement of Financial Position.
A discontinued operation is a component of the entity that has been disposed
of or is classified as held for sale and that represents a separate major line
of business or geographical area of operation, is part of a single
co-ordinated plan to dispose of such a line of business or area of operation,
or is a subsidiary acquired exclusively with a view to resell. The results of
discontinued operations are presented separately in the statement of profit or
loss. During H1 FY 2025, the Board reviewed its strategic options at
Williamson and the asset was classified as an asset held for sale. As a
result, the assets and liabilities of the Williamson mining operation (being
Petra’s 75.0% interest) were classified as held for sale in the Consolidated
Statement of Financial Position at 31 December 2024, in accordance with IFRS
5. The financial results of the Williamson operation for the 6 months to 31
December 2024 were also disclosed separately in the Consolidated Income
Statement as a discontinued operation
Petra entered into an agreement in January to sell its entire interest in
Williamson for a headline consideration of up to US$16 million which is
expected to be completed in the current quarter.
(a)(i) Net assets of Williamson:
US$ million 31 December 2024
Mining property, plant and equipment 26
Right-of-use asset 18
Non-current trade and other receivables 6
Trade and other receivables 20
Inventory 11
Assets held for sale 81
Environmental liabilities 1 (8)
Provisions 2 (23)
Lease liabilities (21)
Trade and other payables (38)
Bank overdraft (10)
Liabilities held for sale (100)
Net liabilities (19)
(1)Provision for the estimated cost of the environmental rehabilitation at
Williamson, which is based on current legal requirements, existing technology
and the Group’s planned rehabilitation strategy.
(2)Included in Provisions, are provisions for lump sum severance amounts upon
death, ill-health retirement and compulsory retirement for employees and a
provision for unsettled and disputed tax claims.
(a)(ii) Result of Williamson:
US$ million 1 July 2024 – 31 December 2024 1 July 2023 – 31 December 2023 1 July 2023 –
30 June 2024
Revenue 32 24 57
Cost of sales (36) (28) (79)
Gross loss (4) (4) (22)
Impairment reversal - other receivables 1 — 7
Financial expense (2) (2) (6)
Loss before tax (5) (6) (21)
Income tax charge — — (1)
Loss on discontinued operation (5) (6) (22)
Attributable to:
Equity holders of the parent (5) (6) (22)
Non-controlling interest — — —
(5) (6) (22)
The consolidated cash flow statement includes the following amounts relating
to Williamson:
US$ million 1 July 2024 – 31 December 2024 1 July 2023 – 31 December 2023 1 July 2023 –
30 June 2024
Operating activities 5 1 (5)
Investing activities (6) (7) (10)
Net cash utilised in discontinued operations (1) (6) (15)
(b) Disposal of Koffiefontein
During financial year 2023 Management took the decision to put the
Koffiefontein mine on care and maintenance. In financial year 2024, the
Company entered into a definitive sale agreement for the sale of Koffiefontein
for nil consideration. On 7 October 2024, the Company announced that
unconditional consent in terms of section 11 of the Mineral and Petroleum
Resources Development Act, No. 28 of 2002 had been granted for the sale of the
entire issued share capital of Blue Diamond Mines (Pty) Ltd to Koffiefontein
Holdings (Pty) Ltd, an affiliate of the Stargems Group.
The transaction was completed during October 2024.
Effect of the transaction
The transaction had the following effect on the Group’s assets and
liabilities
(b)(ii) Net assets of Koffiefontein:
US$ million At 30 October 2024
Total assets - Cash and cash equivalents 1
Provisions and trade payables 23
Net liabilities disposed (22)
(b)(ii) Post-tax profit on disposal of Koffiefontein: Period ended
US$ million 30 October
2024
Liabilities disposed of 23
Add: foreign currency translation recycled on disposal 31
Less: non-controlling interest derecognised (42)
Less: other costs related to the disposal of Koffiefontein (2)
Profit on disposal of discontinued operation 10
Less: cash and cash equivalents disposed (1)
Profit on disposal, net of tax 9
(b)(iii) Results of Koffiefontein:
1 July 2024– 1 July 2023– 1 July 2023–
US$ million 31 December 31 December 30 June
2024 2023 2024
Revenue — — —
Cost of sales — 1 —
Gross loss — 1 —
Impairment charge – property, plant and equipment — — (1)
Profit on disposal (refer to (b)(ii) above) 9 — —
Financial expense — — (2)
Loss before tax 9 1 (3)
Income tax charge — — —
Net profit/(loss) for the Year 9 1 (3)
Attributable to:
Equity holders of the parent 9 1 (2)
Non-controlling interest — — (1)
9 1 (3)
13. ANNOUNCEMENTS AND SUBSEQUENT EVENTS
Disposal of Williamson – On 22 January 2025 the Company announced that it
had entered into an agreement to sell its entire shareholding in the entity
that holds Petra's interest in Williamson, together with all the shareholder
loans such entity owes Petra, to Pink Diamonds Investments Limited ("Pink
Diamonds") for a headline consideration of up to US$16 million.
Completion of the Transaction ("Completion") is subject to the parties
obtaining all necessary regulatory and lender approvals, including approvals
from the Tanzanian Mining Commission and the Tanzanian Fair Competition
Commission. Completion is expected to occur during the first quarter of CY
2025.
Revolving Credit Facility – Post Period End, an amount of ZAR400 million
(US$21 million) was drawn down from the RCF for working capital requirements.
Covenant waiver – On 12 February 2025 Absa Bank confirmed that it would
waive any Default or Event of Default which may arise out of the delivery of
the Compliance Certificate in respect of the FY 2025 Half Year Date. The
waiver is applicable only to December 2024 covenant measurements and includes
a condition that there are no further redemptions or buy-backs of the 2L Notes
to maturity of the RCF.
Change in management – On 17 February 2025, Petra announced that Richard
Duffy has resigned as Chief Executive Officer and Director of the Company by
mutual agreement and with immediate effect. Vivek Gadodia (Chief Restructuring
Officer) and Juan Kemp (Operations Executive: Cullinan Mine) have been
appointed as joint interim Chief Executive Officers, with Vivek Gadodia
responsible for all corporate matters and with Juan Kemp responsible for
operations and capital projects.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
* the Condensed Financial Statements have been prepared in accordance with
European Union-adopted IAS 34 Interim Financial Reporting, and give a true and
fair view of the assets, liabilities, financial position and profit of the
Group; and
* the Interim Management Report includes a fair review of the information
required by the FCA’s Disclosure and Transparency Rules (DTR 4.2.7 R and
4.2.8 R).
By order of the Board
Deborah Gudgeon
Non-Executive Director
16 February 2025
INDEPENDENT REVIEW REPORT TO PETRA DIAMONDS LIMITED
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31 December 2024 is not prepared, in
all material respects, in accordance with International Accounting Standard
34, as adopted by the European Union, and the Disclosure Guidance and
Transparency Rules of the United Kingdom’s Financial Conduct Authority.
We have been engaged by Petra Diamonds Limited (“the company”) and its
subsidiaries (together “the Group”) to review the condensed set of
financial statements in the half-yearly financial report for the six months
ended 31 December 2024 which comprises the Condensed Consolidated Interim
Income Statement, the Condensed Consolidated Interim Statement of
Comprehensive Income, the Condensed Consolidated Interim Statement of
Financial Position, the Condensed Consolidated Interim Statement of Cash
Flows, the Condensed Consolidated Interim Statement of Changes in Equity and
Notes to the Condensed Consolidated Interim Financial Statements that have
been reviewed.
Basis for conclusion
We conducted our review in accordance with Revised International Standard on
Review Engagements (UK) 2410, “Review of Interim Financial Information
Performed by the Independent Auditor of the Entity” (“ISRE (UK) 2410
(Revised)”). A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 1.1, the annual financial statements of the group are
prepared in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union. The condensed set of financial
statements included in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, “Interim Financial
Reporting, as adopted by the European Union.
Material uncertainty related to going concern
We draw attention to Note 2, which indicates that the Group is dependent on
refinancing the Group’s 2L Notes and Revolving Credit Facility, both of
which are not guaranteed.
As stated in Note 2, these events or conditions, along with other matters as
set forth in Note 2, indicate that a material uncertainty exists that may cast
significant doubt on the Group’s ability to continue as a going concern. Our
conclusion is not modified in respect of this matter.
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410 (Revised), however future events or conditions may cause the
group to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom’s Financial
Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including the material
uncertainty related to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting the requirements of the Disclosure Guidance and
Transparency Rules of the United Kingdom’s Financial Conduct Authority and
for no other purpose. No person is entitled to rely on this report unless
such a person is a person entitled to rely upon this report by virtue of and
for the purpose of our terms of engagement or has been expressly authorised to
do so by our prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other purpose
and we hereby expressly disclaim any and all such liability.
BDO LLP
Chartered Accountants
London, UK
16 February 2025
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
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