Petra Diamonds Limited · LSE:PDL
Petra Diamonds — FY2021 Earnings Presentation
41 slides from Petra Diamonds's earnings presentation, Sep 14, 2021
Slide 1: FY 2021 Prelim Results
FY 2021 Prelim Results Petra Diamonds Limited 14 September 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
” PetraDiamonds = o oa D > O CEO
Slide 4: A Resilient Business and Market in FY 2021
A Resilient Business and Market in FY 2021 “We enter FY 2022 with some momentum from a considerably strengthened balance sheet, ongoing optimisation of our asset base and a positive outlook for the diamond market.” • Completion of major capital restructuring coupled with US$62.0 million in sales fro
Slide 5: Relentless Focus on Zero Harm
Relentless Focus on Zero Harm Safety remains our first priority Lost Time Lost Time Injury Non Lost Total Severity Fatalities Injuries Frequency Rate Time Injuries Injuries Rate FY 2021 0 25 0.44 17 42 10.50 FY 2020 0 19 0.29 26 45 13.13 Ongoing focus on safety to address rise in LTIs: • LTIs identi
Slide 6: FY 2021 KPIs
FY 2021 KPIs Strong operating performance PRODUCTION¹ REVENUE¹ OPERATIONAL CAPEX¹ Million carats US$ million US$ million 3.2 -2% 402.3 +65% 22.5 -21% 3.3 402.3 28.6 3.2 22.5 243.3 FY 2020 FY 2021 FY 2020 FY 2021 FY 2020 FY 2021 • Record performance at Cullinan • FY 2021 revenue driven by • Capital e
Slide 7: The Unique Heritage of Cullinan
The Unique Heritage of Cullinan Cullinan continues to produce historic diamonds FY 2021 FY 2022 YTD US$1.0 million per carat 39.34ct blue diamond sold for US$40.18 million – being the most The Letlapa Tala Collection of five blue diamonds sold for US$40.36 million valuable diamond sold in Petra’s hi
Slide 8: FY 2021 Financial KPIs
FY 2021 Financial KPIs Delivering increased EBITDA and Operational FCF in FY 2021 ADJUSTED EBITDA¹,2 OPERATIONAL FREE CASHFLOW1 US$ million US$ million ADJUSTED NET LOSS AFTER TAX¹,2 135.4 +101% 120.1 US$ million (16.1) FY 2020: (54.7) 135.4 120.1 67.3 BASIC PROFIT / (LOSS) PER SHARE from continuing
Slide 9: Responsible Mining – ESG Performance in FY 2021
Responsible Mining – ESG Performance in FY 2021 Continued focus on educational projects, the advancement of women and HDSAs¹, and the efficient use of resources FY 2021 FY 2020 Employee training spend (US$m) 5.8 5.8 0% Social investment and community training spend 1.0 1.9 -47% (US$m) Scholars suppo
Slide 10: Update on Human Rights at Williamson
Update on Human Rights at Williamson Petra and Williamson Diamonds Limited acted swiftly to address the human rights abuse allegations with comprehensive action plan Independent Restorative justice Human Rights Compensation Grievance SGBV initiative measures Defender Policy Mechanism • In May 2021,
Slide 11: Independent Grievance Mechanism
Independent Grievance Mechanism A Tanzanian solution that is trusted, safe to use, and provides fair remedy Scope Safeguards and supports • Prioritisation of human rights • Ensuring effective access to grievances linked to WDL since PDL remedy for victims became WDL owner (2009) • Complainant access
Slide 12: Financial Results
7 PetraDiamonds Tatclaletsl Results
Slide 13: FY 2021 Summary of Results
Restated2 FY 2021 Summary of Results 1 FY 2021 FY 2020 (US$m) (US$m) Revenue 402.3 243.3 Adjusted mining and processing costs1 (261.2) (169.3) Other direct income / (expense) 1.7 1.0 Profit from mining activity¹ 142.8 75.0 Exploration expense — (0.5) Corporate overhead¹ (7.4) (7.2) Adjusted EBITDA¹
Slide 14: Balance Sheet Snapshot
Balance Sheet Snapshot Unit 30 June 2021 30 Jun 2020 Closing exchange rate used for conversion R14.27:US$1 R17.32:US$1 Cash at bank (incl. restricted amounts) US$m 163.8 67.66 Diamond inventories1 US$m 45.1 84.16 Carats 560,699 1,357,5846 Diamond debtors US$m 38.3 4.86 US$336.7 million loan notes (i
Slide 15: Net Debt Movement in FY 2021
Net Debt Movement in FY 2021 15
Slide 16: Operating Costs
Operating Costs FY 2021 costs in line with expectations FY 2021 On-mine cash cost breakdown • Absolute on-mine cash costs in FY 2021 increased by 3.3% (South Africa operations) vs FY 2020 due to: – effect of translating ZAR denominated costs at SA Labour Stores operations at a stronger ZAR/USD excha
Slide 17: Market Update
4 PetraDiamonds Market Update
Slide 18: Favourable Market Fundamentals: Supply contraction
Favourable Market Fundamentals Supply experienced one of the most severe contractions on record in 2020 • Rough diamond production fell 22% by volume to 107.1 Mcts in 2020 (2019: 138.2 Mcts) • Closure of the Argyle mine in Australia in 2020; the mine produced around 10% of world supply by volume in
Slide 19: Favourable Market Fundamentals: Consumer rebound
Favourable Market Fundamentals Rebound in consumer market allowed inventory release in pipeline • Strong consumer demand experienced in key retail markets, notably the US and China, leading to shortages in certain polished goods • Capacity has returned to the midstream manufacturing sector, post maj
Slide 20: Operations Update
7 PetraDiamonds Operations Update
Slide 21: Mine Contribution Split
Mine Contribution Split Strong production despite operational challenges and COVID-19 impact Production by mine Revenue by mine 2% 0% 1% 7% FY 2021: FY 2021: 38% 3.2 million carats¹ $406.9 million¹ 30% 60% 62% Cullinan Finsch Koffiefontein Williamson 2% 8% 18% 44% FY 2020: FY 2020 39% 3.6 million ca
Slide 22: Cullinan
Cullinan Project 2022 throughput initiatives saw volumes increase to 5.06 Mt FY 2021 FY 2020 Cts sold (Mcts) 2.3 1.2 US$/ct 111 98 Revenue (US$m) 250.6 116.5 ROM tonnes (Mt) 4.6 4.0 ROM grade (cpht) 38.2 37.3 ROM cts (Mcts) 1.8 1.5 Total tonnes (Mt) 5.1 4.2 Total cts (Mcts) 1.9 1.6 ZAR/t Opex 260 27
Slide 23: Finsch
Finsch Production impaired by unexpected waste ingress and excessive rainfall • Re-engineering project initiated to re-set cost base and enhance operating margins FY 2021 FY 2020 Cts sold (Mcts) 1.6 1.3 US$/ct 77 75 Revenue (US$m) 123.5 101.1 ROM tonnes (Mt) 2.3 2.7 ROM grade (cpht) 53.5 59.0 ROM ct
Slide 24: Koffiefontein
Koffiefontein Production impaired by excessive rainfall • Re-engineering project initiated to reset cost base targeting cash breakeven FY 2021 FY 2020 Cts sold (Mcts) 0.07 0.07 US$/ct 419 387 Revenue (US$m) 28.0 25.7 ROM tonnes (Mt) 0.8 0.9 ROM grade (cpht) 7.8 7.7 Total cts (Mcts) 0.06 0.07 ZAR/t O
Slide 25: Williamson Update
Williamson Update Mine remained on care and maintenance in FY 2021 • Mine put on care and maintenance in April 2020 to preserve liquidity Plans MUDSTONE are currently being refined to restart during H1 FY 2022 • Board considering its strategic options at Williamson; classified as “asset GB held for
Slide 26: Project 2022
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 a
Slide 27: Outlook
Outlook
Slide 28: FY 2022 Guidance
FY 2022 Guidance Cullinan Finsch Koffiefontein Williamson Group (assuming production restart in H1 FY 2022) ROM tonnes (Mt) 4.2 – 4.4 2.75 – 2.85 0.72 – 0.75 3.6 – 4.0 ROM grade (cpht) 37 – 39 48 – 50 8.0 – 8.5 6.2 – 6.7 Tailings tonnes (Mt) 0.44 0.07 n/a n/a Tailings grade 36 – 37 16 – 17 n/a n/a T
Slide 29: Conclusion
Conclusion Focus on operational delivery and successful implementation of Project 2022 • Stabilising operational performance Continued strong performance at Cullinan driven by Project 2022 throughput improvements Re-engineering projects initiated in July 2021 at Finsch and Koffiefontein to review an
Slide 30: Appendix
” PetraDiamonds Appendix
Slide 31: Capital Structure
Capital Structure Share Price (1 year to 7 September 2021) Major Shareholders % Voting rights Vontobel Holding AG 16.81% Monarch Master Funding 2 (Luxembourg) S.a r.l. 12.00% Invesco Ltd. 8.43% Bank of America Corporation 7.61% Franklin Templeton Investment Management Ltd. 6.37% Petra Diamonds Corpo
Slide 32: Capital Restructuring completed March 2021
Capital Restructuring completed 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 Providers Total
Slide 33: Board of Directors
Board of Directors Peter Hill Richard Duffy Jacques Varda Shine Gordon Hamilton Octavia Matloa Non-Executive Chairman Chief Executive Breytenbach Senior Independent Independent NED Independent NED Appointed January 2020 Appointed April 2019 Finance Director NED Nomination (Chair) and Executive, HSE,
Slide 34: Our Assets
Our Assets Producing the full spectrum of stones from our diversified portfolio Cullinan Finsch Koffiefontein Williamson Acquired July 2008 Acquired September 2011 Acquired July 2007 Acquired February 2009 74% Petra; 26% BEE 74% Petra; 26% BEE 74% Petra; 26% BEE 75% Petra; 25% Gov of Tanzania Block
Slide 35: Iconic Diamonds from Petra’s mines
Iconic Diamonds from Petra’s mines The Greater Star of Africa The Williamson Pink Largest polished yield 55ct rough; 24ct polished; from the Cullinan at gifted to Princess Elizabeth 530ct; sits in the Royal on her engagement Sceptre The Cullinan Heritage Williamson, 1947 Cullinan, 1905 507.5 carats
Slide 36: A Unique Portfolio
A Unique Portfolio Consistent producers of world-class diamonds with exceptional heritage The Cullinan Heritage The Blue Moon of Josephine 32.3ct pink diamond The Cullinan Dream 507.5ct rough, 104ct polished 29.6ct rough, 12.0ct polished sold for $15.0m ($463k/ct) 122.5ct rough, 24.1ct polished sold
Slide 37: Global Production
Global Production The number of significant producing mines is contracting globally 37
Slide 38: Completion of Heavy Capital Intensive Phase
Completion of Heavy Capital Intensive Phase • Petra completed a major capital expansion programme across each of its assets in FY 2019 and is now bedding down steady state production, whilst continuing to invest in life extension projects at CDM (CC1E) and FDM (Block 5) US$ 350 300 250 200 150 100 5
Slide 39: Impact of ZAR/USD Movement on Petra
Impact of ZAR/USD Movement on Petra • Exchange rate volatility over the past 24 months: 90-95% of operating costs are ZAR – ZAR weakness in first half of 2020 impacted by COVID19 and global denominated* sentiment USD – ZAR strength / USD weakness experienced over the past 12 months USD 90-95% – FY 2
Slide 40: Debt Facilities
Debt Facilities New SA Bank debt facilities post restructuring as at 30 June 2021: The Group’s refinanced South African bank facilities comprised a ZAR1.2bn term loan (US$84.1 million) and a ZAR560 million (US$39.2 million) revolving credit facility. As part of the Restructuring, the BEE partner ban
Slide 41: Thank you
Thank you Further enquiries: investorrelations@petradiamonds.com +44 20 74948203 www.petradiamonds.com