Petra Diamonds downgrades output and profit guidance
Source - SMW
Petra Diamonds downgraded full-year production guidance and said its earnings would fall short of market expectations.
Output for the year was now expected at 4.6m-to-4.7m carrots, down from previous guidance of 4.8m-to-5.0m, mostly due to lowered grade guidance at the Cullinan mine in South African and industrial action.
Petra diamond said Ebita for the full year was expected to around 10-15% below consensus, primarily due to the recent strengthening of the Rand.
'Petra's stated strategy is to focus on value as opposed to volume production, which is particularly pertinent to diamond operations, as not all carats are of equal value,' chief executive Johan Dippenaar said.
'Our assessment of optimal recoveries at Cullinan has therefore led us to opt for lower carat volumes, due to the positive impact that not recovering the small diamonds has on the average value per carat.'
'This has led to lowered production guidance for FY 2018, but does not materially impact our expected revenue, further to the positive uplift in Cullinan's average value per carat.'
At 9:19am: (LON:PDL) Petra Diamonds Ltd share price was -11.25p at 67.5p