Shares in Petra Diamonds slipped on Monday after the miner lowered its production forecast for fiscal 2019.
The company expects to produce between 4.6 million and 4.8 million carats in the fiscal year ending June 2019, it said. Excluding its interest in the Kimberley mine — which it sold earlier this month for $22 million — the miner will produce 3.8 million to 4 million carats in 2019, according to the Monday statement.
In July 2017, the miner predicted production would reach 5 million to 5.3 million carats for fiscal 2019. In May, Petra reported that output would be lower than expected, but did not state what the new outlook was.
Production for the fiscal year ending June 30 rose 15% to 4.6 million carats. Revenue climbed 21% to $576.4 million, with the miner selling 4.6 million carats at an average price of $127 per carat.
The miner’s stock price initially fell 8% on Monday morning, before recovering later in the day. It was down 2% as of 1:30 p.m. London time.
“Fiscal year 2018 represents a solid progression for the group after the challenges of fiscal year 2017 and first half [of] fiscal year 2018, and places our production on a firm footing, backed up by a strong safety performance,” said Petra CEO Johan Dippenaar. “The future focus of the group will be on continued optimization of production volumes and cost structures across our portfolio in order to maximize cash generation.”
The company has been trying to pay off a large debt incurred through impairment charges on two of its mines, which permanently lowered the value of the assets, as well as a parcel of diamonds that was seized by the Tanzanian government. Petra has been unable to sell those stones.
In May, Petra announced it would sell additional stock in a rights issue to raise capital to pay its debt. During the year, the miner reduced its debt from $513.9 million to $436.1 million.
Petra operates the Cullinan, Finsch and Koffiefontein underground mines in South Africa and the Williamson open-pit facility in Tanzania.