Petra Diamonds Limited

Revenue for the first half of FY25 was $146 million versus $188 million in the first half of 2024, with the prior-year period helped by 456,000 deferred carats sold in H1 FY24. Average price per carat received was $112 per carat for H1 FY25 on a normalized basis, described as broadly stable despite weaker market conditions. Consolidated net debt closed at $225 million at 31 December 2024, compared with $212 million at end-December 2023 and $285 million at the end of Q1 FY25. Group production declined 2% year over year to 1.4 million carats from 1.43 million carats. Management said FY25 group production guidance remains 2.8 million to 3.1 million carats. For Finsch, FY25 pricing assumptions were revised down to $70-$80 per carat from $80-$90 per carat.

Richard Duffy framed the quarter around resilience, with emphasis on safety, more reliable production, and a reset of the cost base. He said Cullinan and Williamson were performing well, Finsch is improving as the new two-shift configuration settles in, and the company is seeing some signs of optimism from U.S. and India demand plus reduced supply from major producers. He also stressed that the restructuring plan, cost rebasing of $44 million in FY25, and capital optimization are intended to restore sustainable net cash generation and enable refinancing of the 2026 loan notes.

Johan Snyman focused on the financial bridge from operating weakness to balance-sheet management. He reported H1 revenue of $146 million, cash of $42 million at 31 December 2024, and consolidated net debt of $225 million, noting that net debt improved from $285 million at Q1 due mainly to the delayed first tender, cost control, and capital spend efficiencies. He also said Petra bought and canceled $24 million nominal of 2026 loan notes in the half, which increased RCF drawings by $18 million, and that the company will keep pursuing bond buybacks when cash and market conditions allow.

The main analyst concern was covenant risk and the timing of refinancing, including whether there would be a breach of the forward liquidity tests in March. Management said the covenants are tested half-yearly, not in March, and that lenders are relaxed because the debt matures before the bonds; they said any breach would be disclosed to the market. On refinancing timing, management said the mine-plan and restructuring work should be completed within the next three months, after which they intend to speak first with first-lien lenders and then bondholders. On Finsch, management said grade should improve modestly by the end of FY25 and more meaningfully toward end-FY26 into FY27 when the new 3-Level sublevel cave contributes.