Petra Diamonds Ltd

Published : January 29th, 2018

Petra Diamonds shares slump after profit warning

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Petra Diamonds shares slump after profit warning

File picture: A mine worker is seen in front of a giant drill-cum-vacuum cleaner that accelerates drilling at an underground tunnel at Cullinan mine outside Pretoria, northeast of Johannesburg, February 2, 2017. REUTERS/Siphiwe Sibeko

By Arathy S Nair

(Reuters) - Petra Diamonds Ltd (PDL.L) expects full-year core earnings to come in about 10 percent to 15 percent below consensus, the miner said on Monday, sending shares plunging as much as 20 percent.

The profit warning comes after a string of issues at the company, including a three-week strike at its South Africa operations and the blocking of a consignment of diamonds in Tanzania that led the company to flag a possible breach of two of its debt covenants in October.

Petra, which was accused of under-declaring the value of the stones, is caught up in an industry-wide crackdown by the Tanzanian government in an effort to reap more revenue from its minerals. Petra has denied this.

London-listed Petra said earnings before interest, tax, depreciation and amortisation (EBITDA) to be hit by the strengthening of the South African rand. Miners in South Africa pay costs in rand and earn revenue in dollars.

Full-year EBITDA was seen at $256.51 million, according to a Thomson Reuters poll of 13 analysts.

BMO Capital Markets analysts cut its estimate for Petra's 2018 earnings after the trading announcement.

"Petra has a number of headwinds and while we like the longer-term story... in the near-term we expect the shares to remain under pressure until some clarity is received on the issues facing it," RBC analysts wrote in note.

Shares in London fell as much as 21 percent but later traded 13 percent lower to 68 pence by 0916 GMT. Petra was the biggest loser on the London Stock Exchange.

The company, which is currently at peak debt levels at $644.7 million, said net debt is expected to fall to $560 million to 600 million by June 30. It also started formal discussions with its lenders to evaluate the covenants.

The London-listed company cut its production forecast to 4.6-4.7 million carats (mcts), below its previous forecast of 4.8-5.0 mcts, primarily due to lower grade diamonds from its Cullinan mine in South Africa.

Petra said it would mine less of the small, low value diamonds from its Cullinan mine as it would be uneconomic and as the company looks to focus on value rather than volume.

While this could lead to lower production, revenue per tonne is expected to be materially in line with estimates due to higher average diamond prices, Petra said.

It expects overall 2018 revenue to remain in line with current consensus, including the expected sale of the blocked consignment of diamonds in Tanzania.


(Additional reporting by Zandi Shabalala in London; Editing by Saumyadeb Chakrabarty, editing by Louise Heavens)

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Data and Statistics for these countries : Georgia | South Africa | Tanzania | All
Gold and Silver Prices for these countries : Georgia | South Africa | Tanzania | All

Petra Diamonds Ltd

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CODE : PDL.L
ISIN : BMG702781094
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Petra Diamonds is a diamonds producing company based in United kingdom.

Its main assets in production are WILLIAMSON (MWADUI MINE) in Tanzania and KOFFIEFONTEIN, CULLINAN, FISSURE MINES (HELAM, SEDIBENG, STAR), STAR MINE, SEDIBENG MESSINA & DANCARL and HELAM MINE in South Africa, its main asset in development is KIMBERLEY UNDERGROUND in South Africa and its main exploration property is KALAHARI in Botswana.

Petra Diamonds is listed in Australia, in Germany and in United Kingdom. Its market capitalisation is GBX 14.5 billions as of today (US$ 17.2 billions, € 15.4 billions).

Its stock quote reached its lowest recent point on March 27, 2020 at GBX 0.70, and its highest recent level on July 29, 2022 at GBX 99.94.

Petra Diamonds has 531 986 000 shares outstanding.

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Corporate Presentations of Petra Diamonds Ltd
10/8/2007Group Results Presentation - 8-11 October 2007
2/14/2007Investor Presentation - Indaba 2007
In the News and Medias of Petra Diamonds Ltd
5/14/2019Petra Diamonds fetches $15m for 425-carat legacy diamond
4/18/2019Petra Diamonds on a roll after another major find at Cullina...
3/20/2019Petra Diamonds keeps founder Pouroulis as chairman
3/9/2019Petra Diamonds shares jump after another discovery at Cullin...
10/23/2018Petra Diamonds revenue up as production, sales jump
9/17/2018Petra Diamonds CEO to leave following shares value dip, debt...
6/14/2018Petra Diamonds secures $170 million to help lower debt
4/23/2018Petra Diamonds rallies on revenue growth, record output
4/11/2018Petra Diamonds secures new debt agreements with lenders
10/24/2017Petra Diamonds revenue takes hit from Tanzania crackdown
9/21/2017South African workers union to strike at Petra Diamonds' Kof...
7/25/2017South Africa labour disputes weigh on Petra Diamonds results
6/28/2017Petra Diamonds warns output to fall short, shares crash
3/27/2006Corporate profile
Project news of Petra Diamonds Ltd
7/3/2006(Kono)Kono project - operations update
4/27/2006(Fissure Mines (helam, Sedibeng, Star))67 carat diamond sold
Corporate news of Petra Diamonds Ltd
7/25/2016FY2016 Trading Update and FY2017 Guidance Update
7/14/2016TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARES
7/12/2016Notice of FY 2016 Trading Update & Guidance Update
7/8/2016Kimberley Ekapa Mining Joint Venture
7/7/2016TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARES
7/1/2016121.26 carat Cullinan Diamond sells for US$6.0 million
6/30/2016Total Voting Rights
6/21/2016Recovery of a 121.26 ct White Diamond at Cullinan
6/21/2016Block Listing Six Monthly Return
6/1/2016Directorate and Senior Management Changes
5/27/2016AUCTION OF THE WORLD'S LARGEST FANCY INTENSE BLUE DIAMOND
12/18/2015Amec Foster Wheeler awarded Petra Diamonds EPC contract in S...
9/25/2015Petra: A Long-Term Way To Play Diamonds You Might Not Know
6/12/2015Shares fall as Petra Diamonds warns of lower revenues
12/17/2014Exercise of Warrants
12/17/2014Update - Refinancing of BEE partner loans
11/28/2014Total Voting Rights
11/28/2014Director Share Grants
11/28/2014Deferred Share Awards
11/27/2014Results of Annual General Meeting
11/11/2014Board Appointment
11/4/2014Publication of Sustainability Report
10/27/2014Interim Management Statement
10/24/2014232 ct Cullinan white diamond sells for US$15.2m
10/21/2014Annual Report and Notice of Annual General Meeting
5/13/2008important developments
1/24/2008Trading Update
12/20/2007Record Diamond Sale
10/8/2007Preliminary Results - 30 June 2007
5/17/2007RBC Capital Markets hosts world-leading diamond conference
5/30/2006and Xceldiam - strategic cooperation agreement
5/2/2006quaterly activities report for the period ended 31 March 200...
2/7/2006(Fissure Mines (helam, Sedibeng, Star))production growth and exploration upside
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LSE (PDL.L)FRANKFURT (FPO.F)
27.20-1.81%0.306-5.26%
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