Full Year 2024 Petra Diamonds Ltd Earnings Call Transcript
Key Points
- Petra Diamonds Ltd (STU:FPO) successfully reduced its operating cost base by $19 million and CapEx by $80 million in FY24, with plans to sustainably reduce operating costs by $44 million annually from FY25.
- The company repurchased $12 million of its 2026 second lien loan notes at a discount, saving approximately $1.2 million in future annual interest costs.
- Despite weaker diamond prices, Petra Diamonds Ltd (STU:FPO) reported an increase in revenue from $325 million to $367 million, supported by increased contributions from the Williamson operation.
- The company has maintained a focus on safety, achieving seven fatality-free years and reducing its lost time injury frequency rate from 0.24 to 0.16.
- Petra Diamonds Ltd (STU:FPO) is well-positioned to generate free cash flow through market cycles, with a smooth capital profile and reduced cost base, targeting net debt-to-EBITDA below 1.5x by FY26.
- Adjusted EBITDA decreased significantly from $113 million to $66 million due to weaker diamond prices and inventory movements.
- The company reported a net loss after tax of $107 million, compared to a loss of $102 million in the prior year, impacted by impairments totaling $78 million.
- Operational free cash flow remained negative, improving only slightly from negative $65 million in FY23 to negative $17 million in FY24.
- Diamond prices saw a 12.4% decline year-on-year, with market weakness persisting throughout FY24.
- Net debt increased year-on-year, with consolidated net debt at $201 million as of June 2024, despite efforts to reduce operating costs and defer CapEx.
Discussion of our audited full year results for the 12 months ended June 30, 2024. I'm Richard Duffy, CEO of Petra Diamonds; and I'm joined again by Jacques Breytenbach, our CFO, who will cover the key financial metrics. After taking you through our announcement, we will open up for Q&A. This will be hosted both verbally through the raised hand icon, and we will then move on to any typed questions moderated through the chat feature.
We have also today released our annual report and financial statements as well as our sustainability report. Please note that we will be recording this within cast and it will be available on our website later today.
Moderator, could you please move to slide 4. I start today with a slide that you may recall from our Investor Day in June, where we set out the resilience built into the business and Petra's compelling value proposition.
In financial year '24 in response to weaker diamond prices, we reduced our operating cost base by around $19 million and CapEx by
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