Q4 and FY 2024 Operating Update

 

 

16 July 2024

 LSE: PDL

 

 

Petra Diamonds Limited

(Petra or the Company)

 

Q4 and FY 2024 Operating Update

 

Richard Duffy, Chief Executive Officer of Petra, commented:

 

“At our recent investor day, we unveiled our plans to demonstrate Petra Diamonds’ enhanced resilience and compelling value proposition. We are focussed on delivering our target of US$30 million in sustainable annual cost savings together with a smoothed capital profile, to generate net free cash from the current financial year onwards. This will allow us to continue to deleverage and provide flexibility with regards to refinancing our 2026 2L Notes.

 

During FY 2024, carats sold increased by 36% compared to FY 2023, with revenue rising by 13%. This increase was driven by Williamson ramping up to steady-state operations and the planned benefit of the delayed sale of the final tender in FY 2023. Annual production was slightly below our revised guidance at 2.73 million carats.

 

Our net debt decreased by US$11 million to US$201 million at 30 June 2024, compared to US$212 million at 31 December 2023, reflecting our agility in exceeding the cost reduction, capital savings and deferral targets announced in November 2023.

 

Current diamond market weakness is expected to continue through to the end of the calendar year with some price volatility. We expect diamond prices to show modest recovery in the new year with market fundamentals providing pricing support in the medium and longer-term. We are looking forward to addressing the challenges ahead of us from a position of strength, with world class assets that have long term-potential, strong sustainability credentials and an ability to withstand market and capital cycles.”

 

Highlights vs Q3 FY 2024

 

  • LTIFR and LTIs improved to 0.13 and 2 respectively (Q3 FY 2024: 0.20 and 3 respectively)
  • Ore processed increased marginally to 3.0Mt from 2.9Mt with the ramp-up at Williamson increasing production by 0.1Mt and a steady quarter at the Cullinan and Finsch Mines
    • Improvements in grade recovery continued at Finsch given increasing contribution from 78-Level Phase II. Work to resolve the winder issues and the transition from continuous operations to a two-shift, five-day configuration has reduced carats recovered from Q3 FY 2024
  • Revenue, including revenue from profit share arrangements, amounted to US$113 million (Q3 FY 2024: US$66 million), with the increase due to the timing of receipts from Tender 5 carried over from the previous quarter
  • Support from South African Rand weakness continued throughout the period, with the Rand averaging ZAR18.71:US$1 (Q3 FY 2024: ZAR18.95:US$1)
  • Operational capital expenditure for Q4 FY 2024 totalled US$18 million, in-line with updated guidance announced following the decision to defer certain capital project expenditure
  • Amounts drawn under the ZAR1.75 billion (US$96 million) Revolving Credit Facility with Absa Bank remains unchanged, leaving an outstanding balance of ZAR450 million (US$25 million) at 30 June 2024, down from ZAR850 million (US$47 million) at 31 December 2023
  • Consolidated net debt decreased to US$201 million as at 30 June 2024 (31 March 2024: US$232 million) with US$5 million of 2026 2L Notes bought through an Open Market Repurchase programme

 

Operating Summary

 

 

 

Three months

Twelve months

 

 

Q4

FY 2024

Q3

FY 2024

 

Var.

Q4

FY 2023 Restated3

 

FY 2024

 

FY 2023 Restated3

 

Var.

Safety

 

 

 

 

 

 

 

 

LTIFR

Rate

0.13

0.20

-35%

0.12

0.16

0.24

-33%

LTIs

Number

2

3

-33%

2

10

17

-41%

 

 

 

 

 

 

 

 

 

Sales

 

 

 

 

 

 

 

 

Diamonds sold

Carats

1,022,430

476,730

+114%

     561,624

3,158,780

2,329,817

+36%

Revenue1

US$m

112

66

+71%

50

366

324

+13%

Contribution from Exceptional Stones2

US$m

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

 

Production

 

 

 

 

 

 

 

 

ROM tonnes

Mt

2,880,975

2,851,469

+1%

1,826,843

11,325,340

8,637,232

+31%

Tailings and other tonnes

Mt

107,203

75,100

+43%

102,193

369,546

399,877

-8%

Total tonnes treated

Mt

2,988,178

2,926,569

+2%

1,929,036

11,694,886

9,037,109

+29%

 

 

 

 

 

 

 

 

 

ROM diamonds

Carats

603,217

643,350

-6%

592,374

2,593,471

2,517,309

+3%

Tailings and other diamonds

Carats

33,526

22,227

+51%

27,644

136,389

149,216

-9%

Total diamonds

Carats

636,743

665,577

-4%

620,018

2,729,861

2,666,525

+2%

1 Revenue reflects proceeds from the sale of rough diamonds and excludes revenue from profit share arrangements

2 Petra classifies “Exceptional Stones” as rough diamonds which sell for US$15 million or more each

3 Restated to exclude Koffiefontein which is classified as a discontinued operation

 

Group guidance for FY 2025 to 2029

 

 

Unit

FY25

FY26

FY27

FY28

FY29

Total carats recovered

Mcts

2.8-3.1

2.9-3.3

3.1-3.5

3.4-3.7

3.4-3.7

Cash on-mine costs and G&A

US$m

241-257

241-257

227-242

239-255

251-266

Extension capex

US$m

62-67

86-93

78-84

81-88

41-44

Sustaining capex

US$m

26-30

25-28

21-23

22-25

23-25

Notes: Guidance for FY 2026 to 2029 is subject to the Board’s approval of future budgets

Real amounts stated in FY 2025 money terms using 6% SA CPI & 2.5% US CPI. US$ equivalent for SA operations converted at an exchange rate of USD1:ZAR18.36

Detailed mine-by-mine guidance for FY 2025 to 2029 can be found in the guidance section of our website: https://www.petradiamonds.com/investors/shareholder-centre/analysts/

 

 

INVESTOR WEBCASTS

Webcast presentation for institutional investors and analysts at 09:30am BST today

Petra’s CEO, Richard Duffy, and CFO designate, Johan Snyman, will host a live virtual presentation including Q&A for institutional investors and analysts at 09:30 BST today to discuss this operating update.

Link for live presentation via Teams: https://events.teams.microsoft.com/event/c44e6be5-431f-4e65-8ee3-37c3811ddf84@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 BST today

 

Petra’s CEO, Richard Duffy, and CFO designate, 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

 

Please contact

 

Investor Relations, London

Patrick Pittaway      Telephone: +44 (0)784 192 0021

Kelsey Traynor     investorrelations@petradiamonds.com

 

 

 

 

Notes:

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. Q: quarter 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. period: the fourth quarter of FY 2024

 

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 three underground mines in South Africa (Cullinan Mine, Finsch and Koffiefontein) and one open pit mine in Tanzania (Williamson). The Koffiefontein mine is currently on care and maintenance in preparation for a possible sale following the execution of a definitive sales agreement as announced on 8 April 2024.

 

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 with a premium listing on the Main Market of the London Stock Exchange under the ticker 'PDL'. The Company’s loan notes due in 2026 are listed on the Irish Stock Exchange and admitted to trading on the Global Exchange Market. For more information, visit www.petradiamonds.com.

 

 

Corporate and financial summary as at 30 June 2024

 

 

Unit

As at 30 June

2024

As at 31 March

2024

As at 31 December

2023

As at 30 September

2023

As at 30
June

2023

 

Cash at bank – (including restricted amounts)¹

  • Petra Group (excl. Williamson)
  • Williamson

 

 

US$m

 

US$m

US$m

 

40

 

47

(7)

 

37

 

42

(5)

 

75

 

85

(10)

 

74

 

73

1

 

62

 

61

1

Diamond debtors

US$m

31

11

8

33

9

Diamond inventories2

US$m

Carats

32

286,303

71

671,989

54

483,142

52

479,430

66
715,222

2026 Loan Notes3

US$m

246

256

249

255

248

Bank loans and borrowings4

US$m

25

24

47

45

-

Consolidated Net Debt5

US$m

201

232

212

192

177

Bank facilities undrawn and available4

US$m

72

69

8

8

53

 

Note:  The following exchange rates have been used for this announcement: average for FY 2024 US$1: ZAR18.71 (FY 2023: US$1: ZAR17.77); closing rate as at 30 June 2024 US$1: ZAR18.19 (31 March 2024: US$1: ZAR18.92; 31 December 2023: US$1: ZAR18.28 and 30 June 2023: US$1: ZAR18.83).

 

Notes:

  1. The Group’s cash balances excluding Williamson comprise unrestricted balances of US$27 million, and restricted balances of US$20 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$246 million which represents the outstanding principal amount of US$206 million (after the debt tender offers as announced in September and October 2022) plus US$47 million of accrued interest and is stated net of unamortised transaction costs capitalised of US$7 million. During quarter 4 of FY 2024 Petra purchased 2026 Loan Notes with a nominal value of US$5 million through an open market repurchase programme. The repurchased notes were cancelled.
  4. Bank loans and borrowings represent the Group’s ZAR1.75 billion (US$96 million) revolving credit facility. As at 30 June 2024, a total of ZAR450 million (US$25 million) was drawn leaving a further balance of ZAR1.3 billion (US$72 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

Three months

Twelve months

Q4

FY 2024

Q3

FY 2024

 

Var.

Q4

FY 2023

 

FY 2024

 

FY 2023

 

Var.

Sales

 

 

 

 

 

 

 

 

Revenue

US$m

61

32

+90%

 31

189

 182

+4%

Diamonds sold

Carats

534,767

233,460

+129%

 327,429

1,633,456

1,306,457

+25%

Average price per carat

US$

113

137

-17%

 94

116

 139

-17%

 

 

 

 

 

 

 

 

 

ROM Production

 

 

 

 

 

 

 

 

Tonnes treated

Tonnes

1,117,591

1,164,009

-4%

1,120,346

4,497,444

4,376,595

+3%

Diamonds produced

Carats

299,301

319,490

-6%

323,535

1,268,402

1,343,191

-6%

Grade1

Cpht

26.8

27.4

-2%

 28.90

28.2

 30.7

-8%

 

 

 

 

 

 

 

 

 

Tailings Production

 

 

 

 

 

 

 

 

Tonnes treated

Tonnes

107,203

75,100

+43%

 102,193

369,546

352,375

+5%

Diamonds produced

Carats

33,526

22,227

+51%

 27,644

136,389

142,654

-4%

Grade1

Cpht

31.3

29.6

+6%

 27.10

36.9

 40.5

-9%

 

 

 

 

 

 

 

 

 

Total Production

 

 

 

 

 

 

 

 

Tonnes treated

Tonnes

1,224,795

1,239,109

-1%

1,222,539

4,866,990

4,728,970

+3%

Diamonds produced

Carats

332,828

341,717

-3%

 351,179

1,404,791

1,485,846

-5%

 

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

Three months

Twelve months

Q4

FY 2024

Q3

FY 2024

 

Var.

Q4

FY 2023

 

FY 2024

 

FY 2023

 

Var.

Sales

 

 

 

 

 

 

 

 

Revenue

US$m

37

16

+134%

19

120

93

+28%

Diamonds sold

Carats

400,322

152,984

+162%

234,195

1,227,409

848,236

+45%

Average price per carat

US$

93

104

-11%

81

98

110

-11%

 

 

 

 

 

 

 

 

 

ROM Production

 

 

 

 

 

 

 

 

Tonnes treated

Tonnes

446,012

470,706

-5%

706,497

2,096,730

2,431,262

-14%

Diamonds produced

Carats

222,387

242,543

-8%

268,839

1,001,636

1,033,602

-3%

Grade1

Cpht

49.9

51.5

-3%

38.1

47.8

42.5

+12%

 

 

 

 

 

 

 

 

 

Tailings Production

 

 

 

 

 

 

 

 

Tonnes treated

Tonnes

-

-

-

-

-

47,502

-

Diamonds produced

Carats

-

-

-

-

-

6,562

-

Grade1

Cpht

-

-

-

-

-

13.8

-

 

 

 

 

 

 

 

 

 

Total Production

 

 

 

 

 

 

 

 

Tonnes treated

Tonnes

446,012

470,706

-5%

706,497

2,096,730

2,478,764

-15%

Diamonds produced

Carats

222,387

242,543

-8%

268,839

1,001,636

1,040,164

-4%

 

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.

 

 

Williamson – Tanzania

 

 

 

Unit

Three months

Twelve months

Q4

FY 2024

Q3

FY 2024

 

Var.

Q4

FY 2023

 

FY 2024

 

FY 2023

 

Var.

Sales

 

 

 

 

 

 

 

 

Revenue

US$m

15

18

-18%

-

59

49

+16%

Diamonds sold

Carats

87,341

90,285

-3%

-

297,915

175,124

+70%

Average price per carat

US$

168

198

-15%

-

191

280

-32%

 

 

 

 

 

 

 

 

 

ROM Production

 

 

 

 

 

 

 

 

Tonnes treated

Tonnes

1,317,372

1,216,754

+8%

-

4,731,166

1,829,376

+159%

Diamonds produced

Carats

81,529

81,317

+0%

-

323,434

140,516

+130%

Grade1

Cpht

6.2

6.7

-7%

-

6.8

7.7

-11%

 

 

 

 

 

 

 

 

 

Total Production

 

 

 

 

 

 

 

 

Tonnes treated

Tonnes

1,317,372

1,216,754

+8%

-

4,731,166

1,829,376

+159%

Diamonds produced

Carats

81,529

81,317

+0%

-

323,434

140,516

+130%

 

FY 2024 Capital expenditure breakdown

US$m

Q4 FY 2024

FY 2024

FY 2023

 

 

Extension

Stay-in-Business

Total

Extension

Stay-in-Business

Total

Total

Cullinan Mine

7

4

11

36

12

48

53

Finsch

4

1

5

19

6

25

43

Williamson

2

2

  

10

10

19

Total

11

7

18

55

28

83

115

 

 




4015292_0.jpeg

UK 100

Latest directors dealings