Petra Diamonds reports annual net loss, revenue fall as pandemic bites

[JOHANNESBURG] Petra Diamonds on Tuesday reported a 36 per cent fall in revenue and a net loss of US$223 million as the pandemic hit production, sales and prices.

Petra, which operates three diamond mines in South Africa and one in Tanzania, kept production guidance for 2021 on hold due to ongoing uncertainty, noting the risks to production if further Covid-19 restrictions are required.

CEO Richard Duffy said Petra had "unprecedented challenges" to contend with in 2020.

The diamond miner was already struggling before the pandemic hit - it suffered a loss of US$258.1 million last year.

Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) fell 58 per cent to US$64.8 million on revenue down 36 per cent to US$295.8 million for the year ended June 30.

It reported a cash outflow of US$12.3 million versus free cashflow of US$70.5 million last year, and took an impairment charge of US$91.9 million due to reduced diamond pricing estimates.

Petra last month agreed a debt-for-equity restructuring with debt holders which will leave existing shareholders with just 9 per cent of the company.

Although the diamond market has been improving, the resurgence of Covid-19 in key markets poses a threat to the nascent recovery, Petra said, with much resting on consumer activity in the US market in coming months.

Petra's Williamson mine in Tanzania closed in April and remains suspended.

REUTERS