18th Feb 2019 08:35
LONDON (Alliance News) - Petra Diamonds Ltd said on Monday it saw a narrowed loss for the first half of its financial year on higher revenue and production, as the company looks to continue reducing its debt.
In addition, the diamond miner has appointed former AngloGold Ashanti executive Richard Duffy as chief executive officer with effect on April 1.
He will be replacing Johan Dippennar, who the company previously announced is stepping down from the role after 14 years since 2005.
Duffy is currently a director for the Africa Energy Management Platform, a renewable energy firm that he co-founded in 2015. Prior to that, he was part of JSE-listed Anglogold Ashanti Ltd for 16 years from 1998 to 2014, leaving as chief financial officer.
"We are extremely pleased that Richard will be joining Petra Diamonds. He brings with him an impressive depth of global mining experience which we believe will be critical to drive Petra's transition from a phase of intensive capital expenditure and expansion to a focus on steady-state, cash-generative operations," said Chairman Adonis Pouroulis.
Turning to Petra's performance for the six months ended December 31, pretax loss narrowed to USD20.7 million from USD40.4 million the year before.
The comparative half included an impairment that was repeated of USD66.0 million from the Koffiefontein mine in South Africa, following a review which revealed execution risks related to its expansion targets.
Profit from mining activity, however, slipped to USD80.1 million from US86.3 million.
Revenue rose by 8.0% to USD207.1 million from USD191.8 million the prior year as the total number of carats sold increased by 15% to 1.7 million from 1.5 million.
Total production for the six month period increased by 10% to 2.0 million carats from 1.8 million carats.
The Finsch and Koffiefontein mines in South Africa underperformed during the period, while the Williamson mine in Tanzania and Cullinan in South Africa both saw increased production and sales, Petra said.
Looking ahead,Petra Diamonds maintained its annual production guidance of 3.8 million to 4.0 million carats, and expects its net debt position at the end of June to remain in line with its position at the end of December.
Net debt as at December 31 was USD559.3 million, up from USD520.7 million at the end of June 2018. Petra said that reducing its debt remains a priority, but it expects net debt to be about the same this coming June 30.
"Whilst we delivered solid production and continued to improve our safety performance in the first half, we recognise the impact the lower value of the product mix at Cullinan had on our financial results for the period," said Chief Executive Officer Johan Dippennar.
"During the second half, we will accelerate the installation of drawpoints to improve access across the full footprint of the C-Cut Phase 1 block cave. Our focus remains to continue to deliver operational- and capex efficiencies at all of our operations, in order to generate positive free cashflow and subsequent debt reduction," Dippennar added.
Shares in Petra Diamonds were up 8.1% at 28.82 pence on Monday in London.
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