Richard Duffy appointed chief executive of Petra Diamonds

Petra Diamonds announced the appointment of Richard Duffy as its new chief executive on Monday, while announcing smaller net losses but growing debt in the first half.

Replacing long-serving boss Johan Dippenaar, London-listed Petra said Duffy would start work from 1 April.

Duffy will bring 27 years of experience in mining in a variety of operational and functional leadership roles at Anglo American and AngloGold Ashanti, bringing “extensive experience” in both open-pit and underground mining from leading multiple large-scale mining operations across Africa.

Petra also reported an adjusted post-tax loss of $4.5m for the six months to 31 December, a swing from the $47.2m a year before reflecting increases in depreciation charges from increased production from newly commissioned assets, expansion programmes and increased throughput, together with higher finance expenses.

However, a smaller net loss after tax of $57.9m was reported as the previous year included a $66m impairment charge at Koffiefontein.

Cash generated from operations increased to $62.8m, which resulted in a reduction in free cash outflows to $36.8m but saw net debt increase to $559.3m from $520.7m.

The company comments that “The reduction in Petra's net debt remains a priority. However, should product mix and pricing remain at the levels achieved during H1, the Company expects its net debt position at 30 June 2019 to remain largely in line with the balances as at 31 December 2018, assuming BEE debt repayments are maintained according to the existing amortisation schedule”.

Production guidance of 3.8-4.0m carats for the full year to 30th June 2019 remains intact.

The diamond market saw strong demand in September and October for higher value stones, but the rough diamond market saw a softening in demand for lower value small diamonds, which hit overall sales prices.

"This softening in demand was driven by a weakening in global markets and by seasonal destocking at a number of Indian midstream companies. During November and December demand for the lower value small stones saw some recovery due to renewed seasonal demand and the replenishment of stocks by companies in the cutting sector.”

Petra said the first four months of the calendar year are generally the strongest for the diamond market and that it “expects market conditions to remain stable during” what is the second half of its financial year.

On new boss Duffy, Petra said he had a focus on safety, productivity and community relations, while his roles in finance gave him “considerable experience” in taking a strategic view and accountability for all corporate finance, business development and capital expenditure related matters.

Petra said he was “well-respected” within the sector, with high-level networks within the industry and on the continent.

“We are extremely pleased that Richard will be joining Petra Diamonds,” said chairman Adonis Pouroulis.

“He brings with him an impressive depth of global mining experience which we believe will be critical to drive Petra's transition from a phase of intensive capital expenditure and expansion to a focus on steady-state, cash-generative operations.

“We are deeply grateful to Johan Dippenaar for all of the work he has done over the past 14 years to lead Petra through a long period of significant growth and establishing the company as a leading independent diamond producer.”

Richard Duffy added that he was “delighted” to have been appointed chief executive of Petra Diamonds.

“I look forward to working with a very capable team that has grown the business and laid the foundations for delivering on the recent capital investment programme,” Duffy explained.