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Petra commits to dividend

Petra Diamonds has confirmed that it will pay a maiden dividend in 2015 after posting strong half-year figures
February 20, 2015

The share price of Petra Diamonds (PDL) was on the rise after the miner confirmed that it would pay a maiden dividend of 2p for the full year, after it revealed a 22 per cent hike in half-year cash profit to $84.9m (£54.8m).

IC TIP: Hold at 181.9p

First-half revenue was bolstered by the sale of two high-quality diamonds which contributed $38.7m in the period. Management anticipates further progress on the top line, as revenues are skewed towards the second half due to the timing of Petra's tender offers.

Expansion programmes across the company's mining complex in Southern Africa meant that capital expenditure increased by 47 per cent to $125m from a year earlier to $125m. But Petra still managed to pare back net debt to $45.8m from $109m at the 2013 half year.

There was a slight reduction in first-half production due to a fall-away at the Cullinan mine and lower tailings production at Finsch and Koffiefontein, but Petra has still increased its full-year guidance. The miner now expects to deliver 3.3m carats for this year and 5m carats by midway through 2019.

Broker finnCap anticipates EPS of 17.2¢ for 2015, rising to 23.1¢ the following year.

PETRA DIAMONDS (PDL)
ORD PRICE:182pMARKET VALUE:£937m
TOUCH:181-182p12-MONTH HIGH:220pLOW: 141p
DIVIDEND YIELD:nilPE RATIO:21
NET ASSET VALUE:114¢NET DEBT:7%

Half-year to 31 DecTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (p)
2013 (restated)184.646.05.5nil
2014214.858.65.9nil
% change+16+27+9-

£1=$1.55