Crunch! No, not one of Petra Diamonds’ (PDL) large stones caught in the crushing circuit, but the sound of the miner’s share price, which fell 17 per cent on a difficult trading update this week.
In truth, this was a profit warning. A strong South African rand, in which much of Petra’s cost base is denominated, means cash profit for the year to June 2018 could come in 15 per cent below market expectations. Weaker rough diamond prices in the six months to December didn’t help, either, and meant mid-year net debt of $645m (£457m, or almost 30 per cent above Petra’s market value) was “at the high end of expected levels”.
One silver lining arrived in a shift to the recovery of higher-value diamonds, which will result in a dip in full-year output, but higher prices of $140-$160 per carat.
