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Middle East & AfricaPetra Diamonds earnings shine, pandemic dulls outlook

Reuters
2 minutes read

Mine workers are seen under ground at Cullinan mine, near Pretoria, South Africa, February 1, 2019. REUTERS/Siphiwe Sibeko

Miner Petra Diamonds (PDL.L) said on Tuesday its capital restructuring is almost complete after half-year core earnings jumped 20%, but reiterated that the COVID-19 pandemic may further impact its ability to operate within its covenants.

Shares in the company, which kept its forecast suspended, reversed an initial dip to rise 10% to 1.8 pence on the London Stock Exchange by 0822 GMT.

"Restructuring marks a significant milestone in putting the company on a sustainable footing going forward," Chief Executive Richard Duffy said in a statement.

The company said it was relying on the successful completion of the restructuring to continue as a going concern.

Petra reported an 8% drop in revenue to $178.1 million for the first-half ended Dec. 31, while its core earnings rose 20% and came in above Peel Hunt estimates.

"We expect the restructuring to complete in the next few weeks, closing the recent chapter and allowing management and investors alike to look forward into recovering markets," Peel Hunt analysts said.

Petra said diamond pricing on a like-for-like basis increased by a further 8% at the company's January 2021 tender, and that pricing has now returned to pre-COVID-19 levels.

The company said it remained sensitive to the impact of COVID-19 and that despite a successful restructuring it required continued support from its South African lenders.

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