Petra Diamonds Reports Challenging H1 FY 2025 Results Amid Continued Market Weakness
Why we think this is bad
The interim results paint a challenging picture for Petra Diamonds. Revenue dropped 30% year-on-year to US$115 million, while Adjusted EBITDA fell to US$15 million from US$38 million in H1 FY 2024. The company reported a basic loss per share of USc30 from continuing operations. Consolidated net debt increased to US$215 million, leading to covenant breaches in the Revolving Credit Facility. These financial metrics indicate significant pressure on the company's performance and financial stability. However, it's not all negative. Cash flow from operations improved to US$55 million, up from US$34 million in H1 FY2024, demonstrating some success in cost reduction measures. The company has also taken strategic actions, including the planned sale of its Williamson mine and the completed sale of Koffiefontein, which should help streamline operations and improve the balance sheet. Despite these efforts, the persistent weakness in the diamond market continues to pose significant challenges for Petra Diamonds.
Key Points
- Revenue down 30% YoY to US$115 million
- Adjusted EBITDA decreased to US$15 million from US$38 million in H1 FY2024
- Cash flow from operations improved to US$55 million
- Basic loss per share from continuing operations of USc30
- Consolidated net debt increased to US$215 million
- Covenant breaches in Revolving Credit Facility
- Cullinan Mine and Williamson performed well, Finsch showed improvement
- Entered agreement to sell Williamson for up to US$16 million
- Completed sale of Koffiefontein mine
- Implemented cost reduction and restructuring initiatives
Summary
Petra Diamonds' H1 FY 2025 results reflect ongoing challenges in the diamond market. Revenue fell 30% to US$115 million, while Adjusted EBITDA decreased to US$15 million from US$38 million in H1 FY2024. The company reported a basic loss per share of USc30 from continuing operations. On a positive note, cash flow from operations improved to US$55 million, up from US$34 million, demonstrating some success in cost reduction measures. However, consolidated net debt increased to US$215 million, resulting in covenant breaches. Operationally, Cullinan Mine and Williamson performed well, while Finsch showed improvement. The company has taken strategic actions, including the planned sale of Williamson and the completed sale of Koffiefontein. Despite these efforts, Petra Diamonds continues to face significant headwinds from weak diamond demand, particularly in key markets like China and the U.S.