REG-Petra Diamonds Ltd: H1 FY 2025 Operating Update
21/01/2025 07:15
21 January 2025 LSE: PDL
Petra Diamonds Limited
H1 FY 2025 Operating Update
Petra reports its operating results for the first half of FY 2025
Richard Duffy, Chief Executive Officer of Petra, commented:
"Petra delivered a solid operating performance in Q2 FY 2025, leading to total
tonnes treated increasing 7% in H1 FY 2025 compared to H1 FY 2024. As a
result, we are reiterating our FY 2025 production guidance of 2.8 – 3.1 Mcts
for the Group.
Finsch’s performance improved through the first half as mining successfully
transitioned into fresher ore associated with the 78-Level Phase II, resulting
in reduced dilution and more predictable operations, while Cullinan Mine and
Williamson continued to perform well and according to plan. At Cullinan Mine,
we continued to make good progress 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.
In terms of safety, I am pleased that our safety performance has recovered
following a temporary increase in LTIs and the LTIFR early in FY 2025, largely
relating to the implementation of a new shift configuration at Finsch. Safety
remains our top priority and we continue to focus on behaviour-based
interventions in support of our goal of zero harm.
Our third Tender of FY 2025 showed ongoing diamond price weakness at the end
of CY 2024, although we are encouraged by 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 the last tender results, the continued
demand weakness from China and the current product mix at Finsch, we have
revised our FY 2025 pricing assumptions for Finsch from US$80/ct – US$90/ct
to US$70/ct – US$80/ct.
We remain committed to our target of sustainable net cash generation from FY
2025 and have commenced additional cash generation and savings initiatives, as
announced in our Tender 3 results. 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. The Restructuring Plan will form the basis of
re-engaging with our lenders to execute on refinancing our debt in 2025.
Further details will be provided at our interim results in February 2025.
Notwithstanding the continued market weakness, our consolidated net debt
reduced from US$285 million at Q1 FY 2025 to US$225 million at Q2 FY 2025,
with the amount drawn on the RCF increasing by US$18 million from 30 June 2024
mainly due to the repurchase of bonds through the Open Market Repurchase
Programme."
Highlights vs H1 FY 2024
* 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
* Ore processed increased 7% to 6.2Mt from 5.8Mt, largely due to improved
performance at Finsch and Williamson
* Total diamond production decreased marginally by 2% to 1.40Mcts from
1.43Mcts
* The South African Rand strengthened during the period, averaging ZAR17.93 :
US$1 (H1 FY 2024: ZAR18.69 : US$1) following the post-election period, with a
weakening trend resuming towards the end of CY 2024, closing at ZAR18.85 :
US$1
* Revenue (including profit share agreements) amounted to US$146 million (H1
FY 2024: US$188 million) * Diamond sales in H1 FY 2024 benefitted from 456kcts
of FY 2023 sale parcels that were deferred and sold in H1 FY 2024
* Like-for-like prices were down 10% compared to H1 FY 2024 mainly from
smaller size categories
* Consolidated net debt increased to US$225 million as at 31 December 2024 (30
June 2024: US$201 million), mainly due to the continued weak diamond market
and timing of tender sales, with three tenders scheduled for H1 FY 2025 and
four tenders for H2 FY 2025. The effect of the lower diamond pricing
environment was partly offset by cost control and efficiencies in capital
spend profiles
Operating Summary
Safety, sales and production Unit H1 FY 2025 H1 FY 2024
Q2 Q1 Total Q2 Q1 Total
Safety
LTIFR - 0.16 0.28 0.23 0.18 0.12 0.15
LTIs Number 2 4 6 3 2 5
Sales
Diamonds sold Carats 1,215,515 85,449 1,300,964 727,189 932,431 1,659,620
Revenue 1 US$m 124 23 146 90 98 188
Production
ROM tonnes Tonnes 2,842,305 3,112,645 5,954,950 2,875,410 2,717,486 5,592,896
Tailings and other tonnes Tonnes 110,625 98,002 208,627 96,235 91,008 187,243
Total tonnes treated Tonnes 2,952,930 3,210,647 6,163,577 2,971,645 2,808,494 5,780,139
ROM diamonds Carats 655,770 630,768 1,286,538 694,884 652,021 1,346,905
Tailings and other diamonds Carats 65,144 48,857 114,001 36,018 44,618 80,636
Total diamonds Carats 720,914 679,625 1,400,539 730,902 696,639 1,427,541
1 Revenue reflects proceeds from the sale of rough diamonds and excludes
revenue from profit share arrangements
Our revised pricing assumptions for FY 2025 are:
US$ per carat FY 2025 Previous FY 2025 Revised
Cullinan Mine 120 – 130 120 – 130
Finsch 80 – 90 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.
INVESTOR WEBCASTS
Webcast presentation for institutional investors and analysts at 09:30am GMT
today
Petra’s CEO, Richard Duffy, CFO, Johan Snyman, and Chief Restructuring
Officer (‘CRO’), Vivek Gadodia, 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/f94c5334-91de-49d7-9e21-98996e39ca09@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
Petra's CEO, Richard Duffy, CFO, Johan Snyman, and CRO, Vivek Gadodia, 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
For further information, please contact:
Investor Relations, London
Patrick Pittaway Telephone: +44 (0)784 192 0021
Kelsey Traynor investorrelations@petradiamonds.com
About Petra Diamonds Limited
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).
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.
Corporate and financial summary 31 December 2024
Unit As at 31 December 2024 As at 30 September 2024 As at 30 June 2024 As at 31 March 2024 As at 31 December 2023
Cash at bank – (including restricted amounts)¹ * Petra Group (excl. Williamson) US$m US$m US$m 42 36 47 (11) 40 47 (7) 37 42 (5) 75 85 (10)
* Williamson
52
(10)
Diamond debtors US$m — — 31 11 8
Diamond inventories 2 US$m Carats 40 385,878 92 880,479 32 286,303 71 671,989 54 483,142
2026 Loan Notes 3 US$m 225 245 246 256 249
Bank loans and borrowings 4 US$m 43 76 25 24 47
Consolidated Net Debt 5 US$m 225 285 201 232 212
Bank facilities undrawn and available 4 US$m 50 26 72 69 8
Note: The following exchange rates have been used for this announcement:
average for 6M FY 2025 US$1: ZAR17.93 (FY 2024: US$1: ZAR18.71); closing rate
as at 31 December 2024 US$1: ZAR18.85 (30 June 2024: ZAR18.19; 31 March 2024
US$1: ZAR18.92; 31 December 2023: US$1: ZAR18.28; and 30 September 2023:
ZAR18.92).
Notes:
1. The Group’s cash balances excluding Williamson comprise unrestricted
balances of US$35 million, and restricted balances of US$17 million.
2. Recorded at the lower of cost and net realisable value.
3. The 2026 Loan Notes, originally issued following the capital restructuring
(the “Restructuring”) completed during March 2021, have a carrying value
of US$225 million which represents the outstanding principal amount of US$186
million (after the repurchases concluded during H1 FY 2025) plus US$42 million
of accrued interest and is stated net of unamortised transaction costs
capitalised of US$3 million. During H1 FY 2025, Petra purchased and cancelled
2026 Loan Notes with a nominal value of US$24 million through an open market
repurchase programme.
4. Bank loans and borrowings represent the Group’s ZAR1.75 billion (US$93
million) revolving credit facility (RCF). In August and September 2024, the
Group drew down ZAR855 million (c. US$48 million) from the RCF as a result of
the deferral of South African goods from Tender 1 FY 2025. ZAR500 million (c.
US$28 million) was repaid during November and December 2024. As at 31 December
2024, a total of ZAR805 million (US$43 million) was drawn leaving a further
balance of ZAR945 million (US$50 million) available for drawdown.
5. Consolidated Net Debt is bank loans and borrowings plus loan notes, less
cash and diamond debtors.
Mine-by-mine tables:
Cullinan Mine – South Africa
Unit H1 FY 2025 H1 FY 2024
Q2 Q1 Total Q2 Q1 Total
Sales
Revenue US$m 69 9 78 46 51 97
Diamonds sold Carats 640,050 19 640,069 345,867 519,362 865,229
Average price per carat US$ 108 450,928 121 131 98 112
ROM Production
Tonnes treated Tonnes 1,107,787 1,089,570 2,197,357 1,078,409 1,137,435 2,215,844
Diamonds produced Carats 331,079 314,126 645,205 331,349 318,261 649,610
Grade 1 Cpht 29.9 28.8 29.4 30.7 28.0 29.3
Tailings Production
Tonnes treated Tonnes 110,625 98,002 208,627 96,235 91,008 187,243
Diamonds produced Carats 65,143 48,847 114,000 36,018 44,618 80,636
Grade 1 Cpht 58.9 49.9 54.6 37.4 49.0 43.1
Total Production
Tonnes treated Tonnes 1,218,412 1,187,572 2,405,984 1,174,644 1,228,443 2,403,087
Diamonds produced Carats 396,222 362,983 759,205 367,367 362,879 730,246
Note: 1. Petra is not able to precisely measure the ROM / tailings grade split
because ore from both sources is processed through the same plant; the Company
therefore back-calculates the grade with reference to resource grades.
Finsch – South Africa
Unit H1 FY 2025 H1 FY 2024
Q2 Q1 Total Q2 Q1 Total
Sales
Revenue US$m 36.9 - 36.9 28 39 67
Diamonds sold Carats 473,314 - 473,314 298,889 375,214 674,103
Average price per carat US$ 78 - 78 94 104 99
ROM Production
Tonnes treated Tonnes 532,849 477,267 1,010,116 635,872 544,140 1,180,012
Diamonds produced Carats 236,222 204,238 440,460 276,842 259,864 536,706
Grade Cpht 44.3 42.8 43.6 43.5 47.8 45.5
Williamson – Tanzania
Unit H1 FY 2025 H1 FY 2024
Q2 Q1 Total Q2 Q1 Total
Sales
Revenue US$m 18 14 32 17 8 24
Diamonds sold Carats 102,151 85,430 187,581 82,432 37,856 120,288
Average price per carat US$ 174 164 170 201 203 202
ROM Production
Tonnes treated Tonnes 1,201,668 1,545,808 2,747,476 1,161,129 1,035,911 2,197,040
Diamonds produced Carats 88,469 112,404 200,873 86,693 73,896 160,589
Grade 1 Cpht 7.4 7.3 7.3 7.5 7.1 7.3
Capital expenditure breakdown
US$m H1 FY 2025 FY 2024
Extension Stay-in-Business Total Total
Cullinan Mine 16 1 17 48
Finsch 11 2 13 25
Williamson 0 6 6 10
Total 27 9 36 83
Notes:
1. The following definitions have been used in this announcement:
1. cpht: carats per hundred tonnes
2. LTIs: lost time injuries
3. LTIFR: lost time injury frequency rate, calculated as the number of LTIs
multiplied by 200,000 and divided by the number of hours worked
4. FY: financial year ending 30 June
5. CY: calendar year ending 31 December
6. H: half of the financial year
7. ROM: run-of-mine (i.e. production from the primary orebody)
8. m: million
9. Mt: million tonnes
10. Mcts: million carats
11. ktcs: thousand carats
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