Petra Diamonds Limited · LSE:PDL
Petra Diamonds — H1 FY2024 Earnings Presentation
29 slides from Petra Diamonds's earnings presentation, Feb 20, 2024
Slide 1: H1 FY 2024 Interim Results
H1 FY 2024 Interim Results (unaudited) for the six months to December 2023 20 February 2024
Slide 2: Disclaimer
Disclaimer BY ATTENDING THE MEETING WHERE THIS PRESENTATION IS MADE, OR BY READING THE PRESENTATION SLIDES, YOU ACKNOWLEDGE AND AGREE TO COMPLY WITH THE FOLLOWING RESTRICTIONS. This presentation (the "Presentation") has been prepared and issued by and is the sole responsibility of Petra Diamonds Ltd
Slide 3: H1 FY24 Overview
H1 FY24 Overview Richard Duffy CEO A necklace from Boodles’ Peace of Mined collection which showcases stones exclusively sourced from Cullinan Mine
Slide 4: Enhancing resilience
Enhancing resilience A diversified portfolio of Proactive approach to Embedding sustainability long-life assets managing market cycles ✓ Petra manages one of the world’s ✓ Targeting free cash flow generation ✓ Safety our Number 1 priority largest diamond resources throughout the cycle ✓ 2030 GHG red
Slide 5: Safety - our number 1 priority
Safety - our number 1 priority Underground employees conducting mini risk assessment LTI and LTIFR1 1.00 40 35 0.75 30 LTIFR 25 0.50 20 LTI 15 0.25 10 5 0.00 0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 H1 FY24 LTI's 27 27 32 35 25 16 19 25 15 17 5 LTIFR 0.32 0.29 0.29 0.27 0.23 0.21 0.29 0.4
Slide 6: Operating and financial highlights
Operating and financial highlights Ore processed (Mt) Diamonds produced (Mcts) Average price (US$/ct) Revenue (US$m)3 159 208.5 5.80 1.39 1.43 187.8 5.40 1.27 114 113 3.69 116.8 H1 FY23 H2 FY23 H1 FY24 H1 FY23 H2 FY23 H1 FY24 H1 FY23 H2 FY23 H1 FY24 H1 FY23 H2 FY23 H1 FY24 Adjusted EBITDA CAPEX (US$
Slide 7: KPIs embedded into business objectives
Implementing a well-structured Sustainability Framework Operationalisation of our Sustainability Framework underway Recent developments KPIs embedded into business objectives Valuing our • Improved safety performance in H1 FY2024 PEOPLE • The Petra Caving School will be launched in February 2024 to
Slide 8: Recovery underway, near-term caution
Recovery underway, near-term caution Rough diamond prices appear to have bottomed1 Petra’s av. price split by run-of-mine (ROM) and Exceptional Stones (US$15 million or higher)1 250.0 180 US$/ct 160 Index (US$, rebased to 100) 200.0 140 120 148.9 150.0 100 80 100.0 60 40 50.0 20 - H1 FY21 H2 FY21 H1
Slide 9: Supply to halve by c. 2045 with growing consumer base
Supply to halve by c. 20455 with growing consumer base Natural diamond supply has peaked1 (Mcts) Middle-class to increase by 700m people by 20302 160 4.5 40 150 4.0 35 140 3.5 30 US$ trillion 3.0 Spending (right) 130 Billion 25 2.5 120 20 2.0 110 15 1.5 10 100 1.0 0.5 Population (left) 5 90 0.0 0 80
Slide 10: Provenance & traceability
Provenance & traceability Traceability enables the unique ‘story’ of • By 1 September 2024, the G7 will require a each natural diamond to be told2: robust traceability-based verification and De Beers’ ‘Origin Story’ initiative certification for diamonds >0.5ct1 provides QR coded diamonds (over 0.8ct
Slide 11: Laboratory-grown diamonds continue to diverge as a separate product category
Laboratory-grown diamonds (LGD) continue to diverge as a separate product category LGDs and natural diamonds can together grow the overall Price divergence between LGD and natural diamonds1 diamond market, but they are two distinct product categories 100% Value of LGD as % of equivalent 90% • Produc
Slide 12: Our operations
Need to replace since employee has left Our operations Employees at Cullinan Mine
Slide 13: Mine contribution split
Mine contribution split H1 FY24 Production H1 FY24 Revenue2 H1 FY24 Adjusted profit from mining activities1,2 US$m 1,000,000 Carats 120 40 US$m 100 750,000 80 20 500,000 60 40 0 250,000 20 0 0 -20 Cullinan Mine Finsch Williamson Cullinan Mine Finsch Williamson Cullinan Mine Finsch Williamson H1 FY23
Slide 14: Focus on stabilising operations
Focus on stabilising operations Cullinan Mine H2 FY 24 priorities H1 FY24 ADJUSTED • Production largely stable PROFIT MARGIN 38% • Continue to progress on • Further optimisation of cost and (H1 FY23: 63%) the scaled back CC1E capex development project • Value engineering and replanning projects Fins
Slide 15: Financial performance
Financial performance Jacques Breytenbach, CFO The plant at Cullinan Mine
Slide 16: H1 FY 2024 financial highlights
H1 FY 2024 financial highlights Revenue US$m H1 FY H1 FY H2 FY 2024 2023 2023 • Revenue amounted to US$187.8 million (H1 FY 2023: US$208.5 million) with no (Restated) contribution from profit share arrangements in the Period (H1 FY 2023: US$1.4 Revenue 187.8 208.5 116.8 million) • The average realis
Slide 17: On-mine costs in-line with expectations
On-mine costs in-line with expectations Diamond inventory and Group technical, Adjusted mining Total mining and On-mine cash stockpile support and and processing processing costs costs1 Diamond royalties movement marketing costs2 costs Depreciation4 (IFRS) US$m US$m US$m US$m US$m US$m US$m H1 FY245
Slide 18: Balance sheet snapshot
Balance sheet snapshot US$m (unless otherwise stated) As at As at As at 31 December 2023 31 December 2022 30 June 2023 Cash at bank (including restricted amounts) 75.3 146.6 61.8 Diamond debtors 8.1 4.9 8.9 Diamond inventories1 (US$m) 53.5 59.9 65.9 (Carats) 483,142 540,153 715,222 Loan notes (issue
Slide 19: Concluding remarks
Concluding remarks Richard Duffy CEO The Finsch mine in South Africa
Slide 20: Concluding remarks
Concluding remarks Ongoing stabilisation and optimisation of operations Building resilience to generate cash through market & capital cycles Targeting to consistently generate net cash from FY 2025 Right-sizing cost structures to support smooth capital profile Value engineering incorporated in repla
Slide 21: Q&A
Q&A One of our community education projects, My Maths Buddy – a dictionary of mathematical terms for teachers and pupils
Slide 22: Appendix
Appendix Tunnel in Cullinan Mine
Slide 23: Total production per mine
Total production per mine H1 FY 2024 H1 FY 2023 Mine Description Unit Q2 Q1 Total Q2 Q1 Total Tonnes treated Tonnes 1,174,644 1,228,443 2,403,087 1,182,460 1,188,484 2,370,944 Cullinan Diamonds produced Carats 367,367 362,879 730,246 356,348 395,586 751,934 Tonnes treated Tonnes 635,872 544,140 1,18
Slide 24: H1 FY 2024 summary P&L
H1 FY 2024 summary P&L US$m H1 FY 24 H1 FY 23 H2 FY 23 FY 2023 Revenue 187.8 208.5 116.8 325.3 Adjusted mining and processing costs (144.1) (118.5) (83.6) (202.1) Other net direct income 0.8 0.6 (1.1) (0.5) Adjusted profit from mining activity 44.5 90.6 32.1 122.7 Other corporate income 0.4 0.5 0.5
Slide 25: Consolidated net debt movement (1 Jul 2023 - 31 Dec 2023)
Consolidated net debt movement (1 Jul 2023 - 31 Dec 2023) Operational FCF -US$21.1 million US$ million H1 FY24 interims 25
Slide 26: Reduction in gross debt
Reduction in gross debt 400 Disciplined capital allocation to maximise value generation • Capex projects intended to be internally funded 200 • Committed to further reduction in gross debt levels 0 • Opportunities to improve on our 2L debt structure -40.6 -90.8 • Generate sufficient balance sheet he
Slide 27: Impact of ZAR/USD movement on Petra
Impact of ZAR/USD movement on Petra Exchange rate volatility: USD • ZAR weakness in FY2023 impacted by weak macro-economic sentiment and inflationary fears • H1 FY 2024 closing exchange rate (USD:ZAR 18:28) ca. 8% weaker than at closing exchange rate in H1 FY 2023 (USD:ZAR 17.00) Increase / decrease
Slide 28: Group Cost breakdown – fixed (77%) and variable (23%)
Group Cost breakdown – fixed (77%) and variable (23%) Note 1: Based on FY 23 operating cost budget H1 FY24 interims 28
Slide 29: H1 FY 2024 Operating Cost Reconciliation
H1 FY 2024 Operating Cost Reconciliation H1 FY24 interims 29