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Petra Diamonds' core profit climbs, CEO to step down

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Petra Diamonds' core profit climbs, CEO to step down
FILE PHOTO: Mine workers are seen at an underground tunnel at the Cullinan mine, outside Pretoria, northeast of Johannesburg, February 2, 2017. REUTERS/Siphiwe Sibeko/File Photo   -   Copyright  Siphiwe Sibeko(Reuters)
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LONDON (Reuters) – Petra Diamonds <PDL.L> reported a 37 percent rise in full-year adjusted core earnings due to a rise in production at its continuing mines and said its chief executive would step down.

The London-listed miner said on Monday adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $195.4 million from $142 million in the previous year.

Petra was forced to raised $170 million from investors in June as a stronger South African rand, operational delays and a confiscation of diamonds in Tanzania left it strapped for cash and in crippling debt.

But in the year to June, production rose 19 percent to 3.8 million carats when excluding the KEM Joint Venture because it was sold.

Outgoing chief executive Johan Dippenaar has been at the helm since 2005 since Petra merged with Crown Diamonds, and has overseen a rapid, capital-intensive growth phase.

“As Petra now approaches the final stage of its expansion plans, it is positioned to reap the benefits and … a successor for the CEO position will be appointed in due course,” Petra chairman Adonis Pouroulis.

The company slipped into a net loss due to an impairment and a higher depreciation charge as well as higher financing costs.

In July, Petra forecast lower than estimated production for 2019 after reporting 2018 output at the bottom end of its forecast range.

“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,” said Canaccord Genuity Limited analyst Des Kilalea.

Petra shares are down 40 percent so far this year after falling about 50 percent last year. On Monday they were 2.6 percent higher at 0730 GMT.

(Reporting by Zandi Shabalala; Editing by Louise Heavens and Mark Potter)

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