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Interim results for the six months to 31 December 2009
22 February 2010
Petra Diamonds Limited announces its interim results (unaudited) for the six months to 31 December 2009 (“the Period”).
Highlights
- Gross mine revenue up 32% to US$62.4 million (H1 2008: US$47.3 million)
- Group attributable mine revenue1; up 43% to US$48.4 million (H1 2008: US$33.8 million)
- Profit from mining activity (before depreciation)2: US$8.0 million (H1 2008: US$10.2 million)
- EBITDA3: US$38.1 million after Cullinan fair value adjustment of US$31.0 million (H1 2008: US$6.2 million loss)
- Profit after tax: US$37.9 million (H1 2008: US$88.0 million loss)
- Fund raising of US$120 million completed December 2009
- Increase of direct ownership in the Cullinan mine from 37% to 74%
- Cash position at 31 December 2009 of US$65.0 million (H1 2008: US$10.5 million)
Johan Dippenaar, Chief Executive Officer, comments:
"These strong trading results demonstrate that Petra Diamonds has made significant progress during the period, with increased diamond production in a rough diamond market that continues to strengthen. The Company is in a robust financial position, combining profitable mining operations with a well-capitalised balance sheet. Our priority now is to deliver on our core objective to expand production at each mining asset, taking annual production from one million to over three million carats, and further enhance our profile as the unique growth opportunity in the diamond sector."
Analyst presentation and webcast
A presentation for analysts will be held at 9:30am GMT on 22 February 2010 at the offices of Buchanan Communications, 45 Moorfields, London EC2Y 9AE.
A live webcast of the analyst presentation will be available on Petra's website and a recording of this will be available on the website thereafter.
| 6 months to 31 December 09 US$ million | 6 months to 31 December 08 US$ million | Year ended 30 June 09 US$ million | |
|---|---|---|---|
| Revenue¹ | 48.4 | 33.8 | 69.3 |
| Mining and processing costs | (40.5) | (23.5) | (64.0) |
| Other direct income/(costs) | 0.1 | (0.1) | 2.5 |
| Profit from mining activity2 | 8.0 | 10.2 | 7.8 |
| Other operating income | 6.7 | - | 3.2 |
| Exploration expense | (0.3) | (13.2) | (13.7) |
| Corporate overhead | (3.3) | (3.2) | (5.9) |
| Inventory fair value adjustment4 | (4.0) | - | - |
| Cullinan fair value adjustment5 | 31.0 | - | - |
| EBITA3 | 38.1 | (6.2) | (8.6) |
| Impairments | - | (75.2) | (75.2) |
| Depreciation | (5.6) | (7.0) | (11.6) |
| Amortisation | (1.0) | (1.7) | (3.3) |
| Share based expense | (0.5) | (0.4) | (2.3) |
| Net financial income | 3.0 | 0.1 | 7.1 |
| Profit from discontinued operations | - | 2.1 | 1.6 |
| Tax credit | 4.0 | 4.5 | 3.4 |
| Net profit/(loss) after tax - Group | 37.9 | (88.0) | (88.9) |
| Basic and diluted profit/(loss) per share attributable to the equity holders of the company - cents6 | 17.8 | (49.4) | (49.4) |
| Cash at bank | 65.0 | 10.5 | 11.1 |
Notes:
- For the Period 1 July to 16 November 2009, Petra accounted for its interest in Cullinan under the gross method of proportional consolidation, recognising 50% of revenue and 13% minority interests. With effect from 17 November 2009, the effective date of control for accounting purposes that Petra acquired the remaining 50% interest in Cullinan Investment Holdings Limited ("CIHL") from Al Rajhi Holdings W.L.L., Petra now consolidates 100% of revenue and 26% minority interests in line with IFRS; had the basis of consolidation not been changed from 50% to 100% from 17 November, the revenue for the Period would have been US$42.3m.
- Stated before depreciation, amortisation of intangibles, interest paid, foreign exchange gains and losses, asset impairment charges and share based payments.
- EBITDA disclosures are "adjusted EBITDA", being stated before share based expense, foreign exchange gains and losses and asset impairment charges.
- On 25 November 2009 the Group sold a 168ct stone for US$6.28m. At mine level this realised a profit of US$6.28m, as the production cost for this stone is not material. On acquiring the second 50% of CIHL, management prudently estimated the value of this stone for accounting purposes (based on 60% of potential upside sale value) at US$4m, and this became the cost to the Group for IFRS reporting purposes.
- The acquisition of the second 50% of Cullinan Investment Holdings Limited has been treated as stepped acquisition under IFRS3 (revised). The total fair value gain of US$31m reflects the difference between the book value of the original 50% interest and the fair value (as determined by the price paid for the second 50%). A significant component of this relates to the difference between the production cost of the exceptional Cullinan stones and management's valuation of these stones (the exact split is pending sale of 507ct special stone). In assessing the fair values of the second 50% of net assets acquired management has allocated the premium of consideration over net assets to mineral rights and inventories.
- Stated after minority interests (BEE partners Cullinan, Koffiefontein and Sedibeng) of US$871,913.
For further information, please contact:
Cathy Roberts
Telephone: +44 20 7318 0452
Petra Diamonds, London
cathyr@petradiamonds.com
Bobby Morse / Katherine Sutton
Telephone: +44 20 7466 5000
Buchanan Communications
bobbym@buchanan.uk.com /
katherine@buchanan.uk.com
Nicola Taylor
Telephone: +27 11 880 3924
Russell & Associates
nicola@rair.co.za
Mike Jones / Ryan Gaffney
Telephone: +44 20 7050 6500
Canaccord Adams (NOMAD and Joint Broker)
mike.jones@canaccordadams.com
ryan.gaffney@canaccordadams.com
Joshua Critchley / Martin Eales
Telephone: +44 20 7653 4000
RBC Capital Markets (Joint Broker)
joshua.critchley@rbccm.com
martin.eales@rbccm.com
View the Interim results for the six months to 31 December 2009 (PDF - 156KB)
About Petra Diamonds
Petra Diamonds is a leading supplier of rough diamonds, with a gross resource base of 262 million carats. The Company offers a unique growth profile within the diamond sector, increasing its annual production fivefold in the year to June 2009 to over 1 million carats, and with firm plans in place to grow production to over 3 million carats.
In South Africa, Petra has interests in five producing mines – Cullinan, Koffiefontein, Helam, Sedibeng and Star - and has also agreed to acquire the Kimberley Underground mines from De Beers (this acquisition is expected to complete soon). In Tanzania, Petra has an interest in the Williamson mine.
Petra conducts all its operations according to the highest ethical standards, and will only work in countries which are members of the Kimberley Process. The Company is quoted on the AIM market of the London Stock Exchange (AIM: PDL).
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