Shares in Petra Diamond Limited (LON:PDL) fell today after the mining company warned full year production could be at the lower end of its forecast range as it reported its first half results.
Construction work on the new Cullinan plant in South Africa was disrupted by labour unrest during the first half to 31 December 2016.
While the issues have since been resolved and construction resumed at the end of January, Petra said it is “mindful” further labour stoppages could impact on full year production.
The company said there remains the potential for further labour unrest in South Africa as its three-year negotiations with the National Union of Mineworkers ends in 30 June 2017.
In the meantime the group remains on track to deliver full year production of 4.4mln to 4.6mln carats.
Alongside the warning, Petra reported a 48% increase in first half revenue to $228.5mln as sales volumes grew 47% to 1.9mln.
Adjusted underlying earnings (EBITDA) jumped 80% to $87.1mln, supported by a 7% increase in EBITDA margins to 38% as grades improved.
Production rose 24% to 2.02mln carats with Cullinan’s C-Cut Phase 1 and the Finsch’s Block 5 SLC delivering initial output.
Net debt rose to $463.6mln at 31 December from $384.8mln at 30 June as total group capital expenditure edged up to $156.4mln from $151.3mln.
Petra said it intends to resume dividend payments once the company becomes more cash generative and distribution convenants are met.
Shares declined 3.30% to 143.50p in morning trade.