Petra Diamonds Limited Announces Unaudited Earnings and Production Results for the Six Months Ended 31 December 2017; Provides Earnings and Production Guidance for the Year Ended 30 June 2018
For the first half, the production increased 10% to 2,205,056 carats compared to 2,015,087 carats first half of 2017 in line with earlier first half guidance of 2.2 - 2.3 Mcts, due to increases in ROM production across all mines (ROM production rose 12% to 1.8 Mcts, versus 1.3 Mcts in first half of 2017), as expansion projects yielded more undiluted ore. The increase in production was impacted by the labour disruption in first quarter (ca. 60,000 ROM carats), as well as a lower average grade achieved at Cullinan versus guidance.
For the year 2018, revenue expected to remain in line with current consensus (including the expected sale of the blocked Williamson parcel in second half). EBITDA is expected to be negatively affected by ca. 10-15% versus current consensus, primarily due to the recent strengthening of the Rand and its potential impact on Petra's cost base in US Dollar terms; operating costs otherwise remain well controlled. Net debt for 30 June 2018 is expected to fall to $560 - 600 million.
For the year 2018, production guidance is reduced to 4.6 - 4.7 Mcts (4.8 - 5.0 Mcts previously), mostly due to the lowered grade guidance at Cullinan, as well as production lost further to the labour action in South Africa in Q1.