Petra Diamonds' (PDL) shares fell again on these full-year results as the group revealed the recent diamond export block by the Tanzanian government could, if maintained, lead to a breach of its banking covenants. Production at the group’s Williamson mine was halted for four days, but sales need to resume by the close of 2017 to meet cash profit targets. The $15m (£11m) seizure could also affect the group’s debt arrangements, which are rising. Covenants have been granted an extension until the end of the year, but the precarious balance sheet position – not to mention a 10 per cent decrease in annual cash generation – left zero room for dividend payments this year.
That’s not the only downer: delayed ramp-up of the expansion programmes, rising on-mine cash costs as well as the stronger rand all played a part in bringing annual pre-tax profits down year on year. That was despite an 8 per cent acceleration in production to 4m carats.
Analysts at Panmure Gordon still expect pre-tax profits of $170m for the year ending June 2018, giving EPS of 15.3¢ (up from $46.5m and 3.5¢ in FY2017).
| PETRA DIAMONDS (PDL) | ||||
| ORD PRICE: | 74.5p | MARKET VALUE: | £396m | |
| TOUCH: | 74.5-74.8p | 12-MONTH HIGH: | 174p | LOW: 64p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 29 | |
| NET ASSET VALUE: | 112¢ | NET DEBT: | 86% | |
| Year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2013 | 393 | 74.0 | 10.4 | nil |
| 2014 | 472 | 124 | 12.8 | nil |
| 2015 | 425 | 85.0 | 9.5 | 3.0 |
| 2016 (restated) | 431 | 75.4 | 10.4 | nil |
| 2017 | 477 | 46.5 | 3.5 | nil |
| % change | +11 | -38 | -67 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| £1 = $1.36 | ||||
