Exceptional items may have meant a slide in full-year profits for diamond miner Petra Diamonds (PDL), but production grew by an impressive 98 per cent year-on-year to 2.2m carats - beating output targets and helping boost revenues. Still, with the rough diamond market set to remain weak in the short-term, Petra’s growth isn't enough to drive the shares up much further.
Buying the Finsch mine last year, and the resultant production boost, leaves Petra well on the way to reaching its 5m carats a year production target by 2019. Nevertheless, spending plans have been revised slightly so as to limit expansion spending by $60m (£37m) to $170m in 2013. That seems sensible while diamond prices remain soft and the company renegotiates its debt facilities. Fortunately, a syndicate of Petra’s lenders recently gave a provisional thumbs-up to a new funding arrangement, which increases the likelihood of Petra making good on its big plans: it's expecting to boost production by 30 per cent in the next year.
Goldman Sachs forecasts underlying EPS of 17¢ in 2013 compared to a loss per share of 3¢ in the year to end-June - which reflected unrealised foreign exchange losses of $39m.
PETRA DIAMONDS (PDL) | ||||
---|---|---|---|---|
ORD PRICE: | 121p | MARKET VALUE: | £612m | |
TOUCH: | 121-122p | 12-MONTH HIGH: | 189p | LOW: 93p |
DIVIDEND YIELD: | nil | PE RATIO: | na | |
NET ASSET VALUE: | 126¢ | NET DEBT: | 3%* |
Year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
---|---|---|---|---|
2008 | 77.0 | 9.30 | -3.20 | nil |
2009 | 69.0 | -93.9 | -50.2 | nil |
2010 | 164 | 69.0 | 22.7 | nil |
2011 | 221 | 64.4 | 12.8 | nil |
2012 | 317 | 8.40 | -0.48 | nil |
% change | +43 | -87 | - | - |
*Includes $16m of restricted cash £1=$1.62 |