UPDATE 2-Petra Diamonds profit misses estimates, shares hit all-time low

* Generates free cash flow for first time since expansion

* Supply curbs by diamond majors seen tightening market

* Analysts say delivering on efficiencies crucial
(Adds CEO comment, share price, analyst comment)

By Yadarisa Shabong and Barbara Lewis

LONDON, Sept 16 (Reuters) - Shares in African diamond miner
Petra Diamonds hit an all-time low on Monday after it
missed forecasts with a 22% fall in annual profit, as a
Sino-U.S. trade row and protests in Hong Kong dented demand in
big Asian markets.

The miner has been fixing its balance sheet after spending
much of this decade investing in its flagship Cullinan mine in
South Africa.

Petra's share price fell to an all-time low of 7.25 pence,
recovering slightly to trade down 8% by 0830 GMT at 7.45 pence.
The stock is down about 80% this year.

The miner said on Monday it had generated positive cash flow
for the first time since embarking on its major expansion plan
in 2011 and had a programme to improve efficiency and cut debt.

Operational cash flow in 2019 was positive at $70.5 million
compared with outflows last year.

But adjusted core profit fell to $153 million in the year
ended June 30 from $195.4 million a year earlier, compared with
analysts' average expectations of $172 million, according to
company-compiled consensus https://www.vuma.com/public/consensus/pdl/fy19
of seven estimates.

Alongside the impact of the Sino-U.S. trade dispute and
protests in Hong Kong, some analysts blame manmade stones for
price weakness and soft demand. Natural diamond producers say
their product is distinct.

CEO Richard Duffy, who took over in April, said in an
interview he expected the market to remain under pressure. In
the longer term, actions by major producers, led by Anglo
American unit De Beers, to restrict supply should help.

Duffy has been overseeing a three-year plan to cut debt.
Petra said net debt was $541 million at the end of June.

Launched in July, Project 2022 aims to reduce debt by
delivering $150 million to $200 million in cumulative free cash
flow through efficiencies and improvement across the business.

Petra said on Monday non-executive Chairman Adonis Pouroulis
would leave the board by the end of the third quarter 2020, once
a successor had been appointed. Duffy said it was a natural
moment in the company's plans for Pouroulis to step down.

Kieron Hodgson, an analyst at Panmure Gordon who rates the
company "hold", said "The ability to deliver on the stated goals
of 'Project 2022' will be crucial."
(Reporting by Yadarisa Shabong in Bengaluru and Barbara Lewis
in London;
Editing by Sherry Jacob-Phillips and Edmund Blair)