Petra Diamonds FY2015 Revenue Down 10%

Johannesburg: Petra Diamonds reported double-figure percentage drops in both revenue and profits for the year to June 30 on the back of a weakened market and low prices. Revenue was down 10 percent from $471.8 million to $425 million. Adjusted net profit after tax was down 33 percent from $93.7 million to $62.8 million, according to a company statement.

Chief Executive Officer Johan Dippenaar also blamed the performance on the reliance of Petra’s underground mines on “mature, diluted mining areas” but said this and negative market conditions were partly offset by currency weakness, according to the statement. In a later conference call with investors, he said the impact of lower rough diamond pricing was partially hedged by the positive impact of the weaker rand — down 10% against the dollar — on the company’s cost base.

The company also announced a 26 percent drop in adjusted EBITDA to $139.3 million in 2015from $187.7 million in 2014.

Net debt increased 37 percent to $171.7 million from $124.9 million after the miner issued $300 million senior secured second lien notes in May 2015 to repay existing loans and fund the construction of a new processing plant at South Africa’s Cullinan mine. Dippenaar said that despite market challenges, the group still increased tonnage throughput for the year.

Lenders also increased the company’s existing debt facilities by $77.2 million to $290.1 million and agreed to new terms under which interest rates have been cut and repayment deadlines extended.

Despite tough market conditions, Petra has a “strong balance sheet, efficient cost base and increasing operating margin profile as we start to access the new, undiluted mining areas at Finsch and Cullinan from FY 2016 onwards,” the CEO said according to the statement.