Petra Diamonds Limited (LSE:PDL, OTC:PDLMF) said it will launch a US$150mln debt reduction plan and established a dividend policy that it is hoped will return between 15-35% of adjusted free cash flow after unveiling strong financial performance.
The company delivered a 44% increase in revenues to US$585mln, which resulted in a doubling of underlying earnings (EBIDTA) to US$265mln.
Significantly, operational free cash flow for the 12 months ended June 30 was US$230mln.
As a result, it is launching a tender offer for up to US$150mln of debt due 2026, which could save the business as much as US$15mln a year in interest expenses.
A dividend, meanwhile, could be paid in the wake of the interim results.
Petra, the owner, of the Cullinan Mine in South Africa, sold just over 3.5mln carats in rough diamonds, down marginally on the year earlier.
The boost to the top line came from a 52% increase in average price per carat.
Petra’s strong financial performance was helped by the resumption of work at the company’s Williamson Mine, Tanzania’s only large diamond operation.
It was also the culmination of the company’s Project 2022 initiative designed to get the business onto a strong and sustainable footing.