(Alliance News) - Petra Diamonds Ltd on Monday said its loss widened in its most recent financial year due a substantially higher impairment charge relating to its Cullinan, Finsch, Koffiefontein and Williamson assets.
Shares in Petra were down 7.7% at 7.43 pence in London on Monday morning.
The miner's pretax loss came in at USD254.0 million for its year ended June 30, almost three times as wide as its USD85.0 million loss the year before.
This was the result of a USD246.6 million impairment charge in the recent year, more than three times its USD66.0 million impairment charge the year before.
"The group recognised a consolidated income statement charge of USD246.6 million comprising of USD223.7 million, being management's estimate of recoverable value of the Cullinan, Finsch, Koffiefontein and Williamson assets, and USD22.9 million, being management's estimate of the recoverability of other receivables due from external parties," said Petra.
Petra's portfolio consists of four diamond mines. These are Cullinan, Finsch, Koffiefontein in South Africa and Williamson in Tanzania.
In addition, revenue fell 6.4% to USD463.6 million from USD495.3 million as diamond prices realised by Petra fell around 5%, which the firm said was "in line with the wider market".
Full year production totalled 3.87 million carats, a little more than its 3.84 million carat production in financial 2018 and in line with guidance. Petra said it is still on track for financial 2020 production guidance of around 3.8 million carats.
In the near-term, the diamond market is expected to remain challenging. Petra said it has been in talks with its group of South African lenders and has received confirmation of ongoing financial support, with Petra's ZAR1 billion of USA70 million revolving credit facility and ZAR500 million working capital facility undrawn and available.
Petra's South African lender group consists of Absa Bank Ltd, FirstRand Bank Ltd, Investec Asset Management Proprietary Ltd, and Nedbank Ltd.
Petra is working on a restructuring programme called project 2020, which was launched in July and is aimed at improving efficiency.
Petra Chief Executive Richard Duffy said: "Our board has conducted a thorough strategic review of the business. In the short term, we remain firmly focused on the rigorous execution of project 2022, which is expected to reduce the company's high net debt levels, against this backdrop of a challenging diamond market. Addressing this leverage will enable us to capture future organic growth opportunities and reposition Petra as the leading mid-tier diamond producer."
Petra Diamonds (PDL)