Speaking with the Investors Chronicle ahead of the market’s opening bell, Johan Dippenaar declined to predict the bourse’s verdict on Petra Diamonds’ (PDL) interims. You can’t exactly blame him. Not only does Petra’s lossmaking and indebtedness usually contribute to a volatile share price, but these results arrived with news of the chief executive’s imminent replacement by former AngloGold Ashanti chief financial officer and Africa head Richard Duffy.
As such, the 10 per cent jump in the shares that greeted the half-year numbers could well be taken as a sign of hopes for the new broom. On their own, the accounts provided fewer reasons for encouragement, as a $50.8m (£39.2m) depreciation charge combined with a 68 per cent rise in finance costs to again paint Petra’s bottom line red.
The depreciation charge, we are told, relates to increased production from Petra’s newly commissioned assets, although the improved operating efficiencies are yet to feed their way through to cash flow. Although cash generated from operations did increase to $62.8m from $38.9m in the prior period, finance charges and capital expenditure resulted in negative free cash flow of $36.8m, and a corresponding rise in net debt to $559m.
Canaccord Genuity expects a pre-tax profit of $37m and earnings per share of 4¢ for the year to June, compared with losses of $85m and 12¢ a share in FY2018.
| PETRA DIAMONDS (PDL) | ||||
| ORD PRICE: | 29.4p | MARKET VALUE: | £254m | |
| TOUCH: | 28.7-29.4p | 12-MONTH HIGH: | 73p | LOW: 26.5p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 55¢ | NET DEBT: | 108% | |
| Half-year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2017 | 192 | -40.4 | -9.19 | nil |
| 2018 | 207 | -20.7 | -1.74 | nil |
| % change | +8 | - | - | - |
| Ex-div: | n/a | |||
| Payment: | n/a | |||
| £1=$1.29 | ||||
