Petra posts strong interim results, lifts production 24% y/y

JOHANNESBURG (miningweekly.com) – FTSE 250 miner Petra Diamonds’ production increased by 24% year-on-year to two-million carats for the six months ended December 31. 

Revenue rose 48% to $228.5-million, while earnings before interest, taxes, depreciation and amortisation were up 80% to $87.1-million.

"Petra has achieved strong operational and financial results owing to the increased contribution of undiluted ore and continued stabilisation in market conditions,” CEO Johan Dippenaar said in a statement on Monday.
 
Adjusted net profit was up 348% to $28.2-million and operating cash flow increased 89% to $86.4-million.

Dippenaar pointed out that the execution of the group's underground expansion projects at Finsch and Cullinan continued as expected and that both Finsch's Block 5 SLC and Cullinan's C-Cut Phase 1 projects delivered initial production during the period, in line with earlier guidance, and both projects remain on track to deliver one-million tonnes each in 2017.

Construction work on the new Cullinan plant was disrupted by contract labour stoppages; however, this has been resolved and construction work resumed at the end of January.

Commissioning is expected to start towards the end of March, eight weeks later than originally planned and ramp-up to full production is expected in the fourth quarter.

Petra notes that it has sufficient banking facilities to meet its working capital and capital development requirements and that the company maintains headroom against its financial covenants going forward.

Meanwhile, signs of stabilisation in the rough diamond market are evident and Petra expects conditions to remain stable in the second half of the year. 

“The team is highly committed to maintaining momentum and continuing to achieve operating efficiencies throughout the ramp up of each project to accomplish our stated goal of [producing] 5.3-million carats by 2019,” Dippenaar noted.