Petra Diamonds Limited · LSE:PDL
Petra Diamonds — H1 FY2021 Earnings Presentation
38 slides from Petra Diamonds's earnings presentation, Feb 16, 2021
Slide 1: Interim Results Presentation
Interim Results Presentation Petra Diamonds Limited 16 February 2021
Slide 2: Important Notice
Important Notice These Presentation Materials are being supplied to you by Petra Diamonds Limited (the “Company”) solely for your information and use at this presentation. These Presentation Materials may contain information that is confidential, legally privileged or otherwise protected by law. The
Slide 3: CEO Overview
7 PetraDiamonds CEO Overview
Slide 4: Petra is well positioned to deliver from its world class asset base
Adapt to Thrive Petra is well positioned to deliver from its world class asset base • Diversified asset base - Petra has the third largest resources of global listed diamond producers with organic growth opportunities well beyond 2030 • Successfully optimising our portfolio - Project 2022 has elimin
Slide 5: Safety remains our first priority
Relentless Focus on Zero Harm Safety remains our first priority • H1 FY 2021 LTIFR of 0.50 (H1 FY 2020: 0.22) improved from 0.65 Board Safety Pledge – demonstrates during Q1 FY 2021 due to behaviour-based intervention campaign: importance of leading from the top - in-shift safety stops; - visible le
Slide 6: Resilient operating performance in a challenging market
H1 FY 2021 KPIs Resilient operating performance in a challenging market PRODUCTION REVENUE CAPEX¹ Million carats US$ million US$ million 1.74 -16% 178.1 -8% 8.6 -68% 3.59 295.8 36.4 101.9 9.9 1.52 193.9 26.5 2.07 178.1 1.74 8.6 FY 2020 H1 FY 2021 FY 2020 H1 FY 2021 FY 2020 H1 FY 2021 • Outperformanc
Slide 7: Delivering increased EBITDA and FCF
H1 FY 2021 KPIs Delivering increased EBITDA and FCF ADJUSTED EBITDA¹ OPERATIONAL FREE CASH FLOW US$ million (PRE-RESTRUCTURING FEES) ADJUSTED NET PROFIT / (LOSS) US$ million AFTER TAX¹ 80.8 +20% 54.0 +394% US$ million H1 FY 2020: (10.2) 54.0 2.7 80.8 52.0 67.2 ADJUSTED PROFIT / (LOSS) PER SHARE from
Slide 8: Responsible Mining in H1 FY 2021 – Playing a Positive Role within our Communities
Responsible Mining in H1 FY 2021 – Playing a Positive Role within our Communities Petra constructed the Lethabong Day Centre within The Cullinan mine provides scholarships and Launch of the artisanal mining initiative at the Onverwacht school rounds, with 3 classrooms bursaries to local students. In
Slide 9: Financial Results
Y PetraDiamonds Tratclaletsl Results
Slide 10: H1 FY 2021 Summary of Results
H1 FY 2021 Summary of Results H1 FY 2021 H1 FY 2020 FY 2020 (US$m) (US$m) (US$m) Revenue 178.1 193.9 295.8 Adjusted mining and processing costs1 (99.2) (123.6) (225.3) Other direct income / (expense) 5.1 0.3 2.0 Profit from mining activity1 84.0 70.6 72.5 Exploration expense — (0.2) (0.5) Corporate
Slide 11: Balance Sheet Snapshot
Balance Sheet Snapshot Unit 31 Dec 2020 31 Dec 2019 30 Jun 2020 Closing exchange rate used for conversion R14.69:US$1 R13.99:US$1 R17.32:US$1 Cash at bank (incl. restricted amounts) US$m 106.3 53.6 67.6 Diamond inventories1 US$m 105.0 85.2 84.1 Carats 1,385,402 992,425 1,357,584 Diamond debtors US$m
Slide 12: Net Debt Movement in H1 FY 2021
Net Debt Movement in H1 FY 2021 Operational FCF US$54.0 million 12
Slide 13: Operating Costs
Operating Costs Costs in line with expectations Focus on costs • Absolute on-mine cash costs in H1 FY 2021 reduced H1 FY 2021 On-mine cash cost breakdown by 30% vs H1 FY 2020 and in line with expectations (South Africa operations) due to: – the effect of translating ZAR denominated costs at Labour S
Slide 14: Impact of ZAR/USD Movement on Petra
Impact of ZAR/USD Movement on Petra • Exchange rate volatility over the past 18 months: 90-95% of operating costs are ZAR – ZAR valuation impacted by COVID19 and global sentiment denominated* USD – Average H1 FY 21 exchange rate (US$1:ZAR16.27) ca. 10% weaker compared to H1 FY 20 (US$1:ZAR14.69) USD
Slide 15: Capital Restructuring expected to complete early March 2021
Capital Restructuring expected to complete early March 2021 9% Existing Shareholder Equity USD 56% Note US$650m Holders New Equity Principal New Equity outstanding Debt for on existing Equity Swap 2022 Notes 35% Equity to New Available to Money providers of US$49m US$30m in new May and Nov c.US$702m
Slide 16: Operations Update
7 PetraDiamonds Operations Update
Slide 17: Mine Contribution Split
Mine Contribution Split Solid production despite operational challenges in H1 FY 2021 Production by mine Revenue by mine 2% 6% 3% H1 FY 2021 H1 FY 2021¹ 40% 1.7 million carats $178.1 million 31% 58% 60% Cullinan Finsch Koffiefontein Williamson 2% 8% 18% FY 2020 FY 2020 39% 44% 3.6 million carats $29
Slide 18: Cullinan: Project 2022 throughput initiatives delivering increased volumes
Cullinan Project 2022 throughput initiatives delivering increased volumes • Undercut ring blasting commenced – FY 2015 • Production levels established at 839m and shaft to 934m commissioned – FY 2016 • New plant with throughput capacity of 4.0 Mt ROM and 2.0 Mt tailings – commissioned Q1 FY 2018 • G
Slide 19: Finsch: Steady state production from Block 5 SLC
Finsch Steady state production from Block 5 SLC • Block 5 SLC production commenced from first tunnels on 70L – FY 2016 • Production on 75L commenced in Q3 FY 2018; all tunnels in production - Q3 FY 2019 • Construction of ground handling infrastructure completed – Q1 FY 2019 • Overall carat productio
Slide 20: Finsch – Block 5 SLC Progression
Finsch – Block 5 SLC Progression 70 Level 73 Level 70 Level 75 Level 78 Level 73 Level 75 Level 78 Level 20
Slide 21: Waste Ingress at Finsch in the upper levels of Block 5 SLC
Finsch Waste Ingress at Finsch in a number of the upper levels of the Block 5 SLC • Mitigating measures: - revision to draw strategy to limit planned draw tonnage for 4 months - a build-up of inventory rings to allow for increased blasting from March 2021 - a change to drill and blast designs to opt
Slide 22: Koffiefontein: Steady state production from SLC reached in FY 2019
Koffiefontein Steady state production from SLC reached in FY 2019 • Production commenced from 56 Level SLC – FY 2015 • Ground handling system commissioned – Q3 FY 2018 • Production from 60L commenced – Q2 FY 2019 • H1 FY 2021 production down 19% to 36 kcts • Treatment from underground ore mined supp
Slide 23: Project 2022: Optimising production and driving cost efficiencies
Project 2022 Optimising production and driving cost efficiencies • Project 2022 remains a key focus to further stabilise our operations and ensure that continuous improvement is embedded in our operating model and culture • Project 2022 key drivers are throughput capacity and utilisation increases,
Slide 24: Recovery in Rough Diamond Prices
Rough Diamond Prices Strong consumer demand and destocking in the midstream has led to a recovery in rough diamond prices • Robust midstream demand as inventories of rough and polished Actual Actual Actual diamonds remained low thanks to strong sales of diamond H1 FY 2021 H1 FY 2020 FY 2020 jeweller
Slide 25: The supply side outlook continues to contract
Favourable Long-term Market Fundamentals The supply side outlook continues to contract • Rough diamond production fell 7% to 138.2 Mcts in 2019 with a value of $13.6bn (2018: $14.5bn) • Argyle mine closed 2020; the mine produced around 10% of world supply by volume in 2019 and was only major source
Slide 26: Outlook
” PetraDiamonds Outlook
Slide 27: Focus on operational delivery and successful implementation of Project 2022 initiatives
Outlook Focus on operational delivery and successful implementation of Project 2022 initiatives • Stabilising operational performance and mitigating emerging challenges Continued strong performance at Cullinan driven by Project 2022 throughput improvements Close monitoring and implementation of miti
Slide 28: Appendix
7 PetraDiamonds Appendix
Slide 29: Capital Structure
Capital Structure Share Price (1 year to 11 February 2021) Major Shareholders as at 2 February 2021 % Voting rights M&G Plc 10.15% Standard Life Aberdeen plc 9.97% Directors 0.08% Listing LSE: PDL Petra Diamonds Corporate Bond Average daily trading volume across all Issue date: May 2017 platforms (s
Slide 30: Board of Directors
Board of Directors Richard Duffy Jacques Breytenbach Varda Shine Peter Hill Senior Independent Non- Independent Non- Chief Executive Finance Director Appointed April 2019 Executive Director Executive Chairman Appointed January Remuneration, Audit & 2020 Risk, Nomination, HSE and Executive Committee
Slide 31: Our Assets
Our Assets The heritage of our assets imbues our diamonds with unique character Koffiefontein Cullinan Williamson Finsch 74% Petra; 26% BEE 74% Petra; 26% BEE 75% Petra; 25% Gov of Tanzania 74% Petra; 26% BEE Sub-level cave Block cave / Sub-level cave Open Pit Sub-level cave / Block cave Mine Plan t
Slide 32: A Unique Portfolio
A Unique Portfolio Consistent producers of world-class diamonds with exceptional heritage The Cullinan Heritage 25.5ct blue diamond The Blue Moon of Josephine The Cullinan Dream 507.5ct rough, 104ct polished sold for $16.9m ($663k/ct) 29.6ct rough, 12.0ct polished 122.5ct rough, 24.1ct polished sold
Slide 33: The Letlapa Tala Collection
The Letlapa Tala Collection A unique discovery and the first ever sale of five blue diamonds at one time • In September 2020 Petra recovered five blue diamonds of significant colour, clarity and size at the Cullinan mine, ranging from 9 to 25 carats in size • Blue diamonds are so rare that there are
Slide 34: Global Production: Only 29 significant kimberlite mines in production
Global Production Only 29 significant kimberlite mines in production today 34
Slide 35: The First Ever Global Advertising Campaign for the Natural Diamond Council
The First Ever Global Advertising Campaign for the Natural Diamond Council The NDC aims to reinforce the positive impact of the natural diamond industry and inspire, educate and protect the consumer • In September 2020 the NDC launched its first global advertising campaign ‘For Moments Like No Other
Slide 36: H1 FY 2021 vs. H1 FY 2020 Operational Results
H1 FY 2021 vs. H1 FY 2010 Operational Results Cullinan Finsch Koffiefontein Williamson H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY H1 FY Unit 2021 2020 2021 2020 2021 2020 2021 2020 ROM PRODUCTION Tonnes treated Tonnes 2,339,473 2,295,197 1,323,000 1,534,256 493,661 561,296 0 2,654,906 Grade cpht 39.1
Slide 37: Debt Facilities
Debt Facilities Existing bank debt facilities of ZARR900 million fully drawn as at 31 December 2020 (ca. US$61.2 million): Utilised at Size Size US$M1 Covenants Lender Type 31 Dec 2020 ZARM US$M1 ZAR Revolving Absa & Nedbank 400 27.2 27.2 Waiver2 credit facility ZAR Working capital Absa & RMB (FNB)
Slide 38: Thank you
Thank you Further enquiries: investorrelations@petradiamonds.com +44 20 74948203 www.petradiamonds.com