Business
Comment Regarding Recent Share Price Performance
Comment Regarding Recent Share Price Performance.
About this update from Petra Diamonds Limited
[{"type":"text","content":"\n \nRNS Number : 1557H Petra Diamonds Limited 30 July 2019 \n\n \n \n \n \n \n \n\n\n\n30 July 2019\n\n\n LSE: PDL\n\n\n\n \nPetra Diamonds Limited\n(\"Petra\" or the \"Company\" or the \"Group\")\n \nComment Regarding Recent Share Price Performance \n \n \nPetra Diamonds Limited provides the following comment in response to the recent share price performance following the release of the Company's FY 2019 Trading Update and FY 2020 Guidance on 22 July 2019. \n \nThe FY 2019 Trading Update highlighted that Petra delivered a solid set of operational results for FY2019 with improved safety (LTIFR improved from 0.23 to 0.21), production of 3.87 Mcts, in line with guidance, and lower capital expenditure of US$81.7m (down from US$129.6 million in FY2018) and below the Company's FY2019 guidance of US$100 million. \n \nPetra generated $17 million of free cashflow (after adjusting for diamond debtors) in the second half of FY 2019, after paying the interest on the bond ($23.6 million) and repaying $20 million against the BEE loan. In other words, operating free cashflow for the second half of FY 2019 was over $60 million. This is a significant achievement given the current challenging market conditions in rough diamonds. \n \nThe Trading Update introduced Project 2022, an initiative that will identify and drive efficiencies and improvements across all aspects of the business to enable the Company to deliver an initial target of $150-200 million free cashflow over a three year period. Project 2022 will focus on enhancing cashflow generation and reducing net debt to provide optionality to address the refinancing of the bond. The Company is not considering raising equity to refinance the bond. \n \nProject 2022 is a bottom up assessment of the business and is based on the following prudent assumptions:\n· flat nominal diamond prices over the three year period;\n· the exclusion of any exceptional stones (defined as having a value of US$5 million or greater) from our Cullinan Diamond Mine; and\n· an exchange rate of ZAR14 to US$1 in FY 2020, devaluing at 3.5% annually to ZAR14.49 in FY 2021 and to ZAR14.99 in FY 2022.\n.\nTherefore the initial target of $150-$200 mill...