Petra Diamonds Share Discussion Threads

[argylerich] 17/9/2018 12:06

Chunk of broker info courtesy FT Alphaville:

Petra Diamonds Ltd (PDL:LSE): Last: 39.30, up 2.62 (+7.15%), High: 39.34, Low: 36.84, Volume: 3.03m
11:59 am
BE
Mixed numbers, which RBC can summarise.

12:00 pm
BE
The results were weak, but with $40m of additional, one-off, depreciation charges, it appears the FY18 financials have cleared the decks for future reporting. The company confirms that CEO Johan Dippenaar will step down once a suitable replacement is named. Q1 production is 10% ahead of guidance. Although diamond prices remain weak, we continue to see significant value in the shares.

12:00 pm
BE
Full year results came in below our expectations with EBITDA at $195m vs. RBC $203m, although this is largely due to the stripping out of the to-be-sold KEM asset and associated restatements. Adj EPS at $0.01 was significantly below our $0.08 number, but this was impacted by a $40m higher non-cash depreciation charge related to accelerated depreciation in old mining areas at Cullinan and Finsch. The pre-announced $66m write down also impacted numbers as expected.

12:00 pm
BE
The company has disclosed July and August production at 718kcts which we calculate to be at 4.3mcts annualised and 10% ahead of our expectations. We believe this lends credence to the thesis that the company has provided an overly conservative (yet understandable) guidance level for the year. This positive however is offset to an extent by the September tender achieving a -5% decline below the average price in the past 6 months. September is generally the weakest period in the seasonal rough diamond market, but Cullinan prices continue to be at the low end of the range.

12:00 pm
BE
So ..................

12:01 pm
BE
As part of our commodity and currency price update, our FY19 ZARUSD forecast moves from 12.5 to 14.6 (LT from 12.5 to 13.5) and we reduce our diamond price forecasts by 3% (in part by lowering Cullinan specific prices to $131/ct). This sees earnings and cashflow forecasts increase, moving our target price to 60p (previously 55p). Challenges remain but we see the shares as fundamentally mispriced and re-iterate our Outperform rating.

12:01 pm
BE
Background here is Johan Dippenaar departing post the emergency rights issue, yes?

12:02 pm
BE
Here's Canaccord.

12:02 pm
BE
These results paint an underlying picture of operational improvements and the development of a corporate structure more in keeping with a miner moving from being capex-intensive to a stable and larger producer and, hopefully, a strong free-cash flow generator. The positives we saw at Cullinan recently plus the benefits of a weaker ZAR and a more comfortable (though still highly levered) balance sheet must be weighed against the need for Cullinan to deliver larger white and blue stones to take its average price above FY18’s $124/ct average (H2 FY18 was $118/ct). On balance we think there is a positive message in these results, but proof of delivery is needed for sustained rerating.

12:02 pm
BE
And Panmure.

12:03 pm
BE

[ukgeorge] 17/9/2018 11:45

Fingers crossed that this is the start of a better couple of years for petra.

[argylerich] 17/9/2018 10:20

Well Mr Market seems happy. The risk/reward profile seems to be shifting towards the upside now with costs/debt under control. Only the Williamson blot remains, but that's priced in at these levels.
Roll on the low 40s and if we have a clean 3 months, over 50p by christmas as the ship is seen to pick up speed.

[matt123d] 17/9/2018 09:45

Next area is 47p on a weekly basis

[ukgeorge] 17/9/2018 09:41

I'll be happy with 45p :)

[g2theary] 17/9/2018 09:39

Back to 80p in no time this... certainly before year end IMO

[ukgeorge] 17/9/2018 09:17

""Johan has led Petra through a long period of significant growth, taking the Company's annual production from approximately 175,000 carats in FY 2006 to 4.6 million carats in FY 2018, and establishing the Company as a leading independent diamond producer. As Petra now approaches the final stage of its expansion plans, it is positioned to reap the benefits and, in line with the Nomination Committee's Succession Plan, a successor for the CEO position will be appointed in due course. Johan will continue in the role of CEO until this time and will work closely with the Board to ensure an efficient handover. I would like to take this opportunity to express the Board's sincere gratitude for all that he has done for Petra."

A long time overdue and my favourite piece of the update.

[resourceful] 17/9/2018 08:37

need a pile more money

[g2theary] 17/9/2018 08:37

Also there is 5% of shorts to close on this :)

[g2theary] 17/9/2018 08:28

These should come good now :)

[argylerich] 17/9/2018 08:03

No new horror stories then, let's see what the market thinks

[matt123d] 14/9/2018 20:57

First higher high close on the weekly since the beginning of June!

[argylerich] 14/9/2018 17:06

boooo :-( bring on Brexit ;-)

[argylerich] 14/9/2018 16:39

Is there any broker forecasts out there?

[ukgeorge] 14/9/2018 16:34

nice close

[argylerich] 14/9/2018 15:48

Old Mutual have reached the declaration threshold with their new short of .5% are they too late to the party or are we in too early??

So who's going to be happier on Monday? Place your bets....

[ukgeorge] 14/9/2018 12:07

Fingers crossed that the results aren't too terrible and don't wipe the last couple of positive days gains off.

[ukgeorge] 13/9/2018 16:46

Two days in a row!!!! What a run!!!

[matt123d] 13/9/2018 14:59

Added a few more above 35p

[ukgeorge] 13/9/2018 10:36

come on Petra :)

looks like it is breaking the current downtrend (of the last 12 trading days)

[argylerich] 13/9/2018 08:37

Hmmm, that's a wide question ;-) If you want specifics, I'd look at the rights prospectus, all the classic stuff should be listed there.
For me, the main unspoken issue is Williamson. The Govt of Tanzania seem to have backed off from just outright taking the diamonds and have been getting clever by not repaying the taxes due. The question being, is how long is it worth while operating there still?
I believe Acacia is still there, so that bodes well that the Govt and its cronies understand not to make things un-viable... but we'll see.