(Sharecast News) - Shares in Petra Diamonds lost their shine on Monday after the London-listed miner cut its production guidance.
Updating on first-half trading, the group - which has three underground diamond mines in South Africa as well as the Williamson open pit mine in Tanzania - said recent operational improvements had created "greater stability and resilience" across the business.
However, total diamond production fell 21% in the six months to 31 December, to 1.4m carats, due to lower grades at the Cullinan mine, lower tonnes mined at Finsch and production suspensions at Williamson and Koffiefontein, which was placed under "care and maintenance". Petra is seeking to permanently close the loss-making Koffiefontein pit, which has been mined since the 1880s.
As a result, Petra said it had reduced its diamond production guidance for the current year to around 2.8m carats from between 3.3m and 3.6m previously forecast, and to between 3.0m and 3.3m carats for the 2024 financial year. It had earlier guided to between 3.3m and 3.6m for 2024.
First half revenues were also lower, falling to $212.1m from $264.7m a year previously.
As at 1130 GMT, shares in the stock were down 7% at 94.76p.
Richard Duffy, chief executive, said: "Despite some challenges in the first half, Petra continues to benefit from the operational improvements we have made across the business, which provider for greater stability and resilience.
"With a stronger product mix offsetting the recent softness in rough diamond prices, we remain confidence that we will continue to generate cash to fund capex, allow further deleverage and pay dividends."
SP Angel said: "Petra faces a challenging period as it readjusts its operations, although encouraging results are emerging from Finsch, and operations are Cullinan are delivering the expected tonnage, allowing focus to turn to around 40 carats per hundred tonnes by the end of the 2024 full year.
"Operations at the Williamson mind remain suspended following the tailings discharge in November, and are unlikely to resume during the current financial year."
Petra Diamonds (PDL)