Struggling Petra Diamonds (LON: PDL) reported on Tuesday a 36% fall in revenue and a net loss of $223 million (168.7 million pounds) for the year ended June 30, as the pandemic deepened the company’s financial woes.
The diamond miner, which has three operations in South Africa and one in Tanzania, said covid-19 affected production, sales and prices in the period.
Petra posted revenue of $295.8 million in the 2020 fiscal year, compared to $463.6 million in FY 2019.
It reported a cash outflow of $12.3 million versus free cash flow of $70.5 million last year, and took an impairment charge of $91.9 million due to reduced diamond pricing estimates.
The global spread of covid-19 and consequent demand drop contributed to a 58% year-on-year decrease in Petra’s earnings before interest, taxes, depreciation and amortisation (Ebitda), to $64.8-million in the reporting year.
The adjusted Ebitda margin also worsened to 22%, compared with 33% in the prior financial year.
In terms of output, Petra churned out 3.59 million carats of diamonds for the year, a 7% fall compared to the 3.87 million carats it mined in 2019.
The diamond miner was already struggling before the pandemic hit — it suffered a loss of $258.1 million last year and its shares have continuously fallen, trading on Tuesday afternoon at just 1.64 pence from around 130p at the start of 2017.
The company’s weak financial position pushed it to put itself up for sale in June. Petra reversed the decision in October, opting instead for a debt-for-equity restructuring. The deal would leave existing shareholders with just 9% of the company.
Petra is also dealing with allegations of human rights abuses at its Williamson mine in Tanzania, resulting from the actions of its security guards.
The company has hired an external consultancy to assess the claims. It noted the investigation would be completed by the end of 2020 and that the mine, which it closed in April, remains suspended.
As a result, production during the first quarter of financial year 2021 (July-September 2020) is down 10% to 974,346 carats from the same period in the previous year.
Revenue, however, has jumped by 33% to $82 million owing to the release of inventory carried over from the preceding quarter.
Despite the numerous challenges, Petra is targeting a ramp-up to pre-covid-19 production levels. For now, it’s keeping a lead on production targets for 2021 as a second coronavirus wave keeps markets guessing.