(Reuters) - Petra Diamonds Ltd <PDL.L> reported full-year revenue below analysts' estimates on Monday and said it expects next year's production to be slightly lower, as it struggles with a diamond market hit by weak demand and lack of easy credit.
The South Africa-focussed company's shares were down 4.4% at 17.2 pence in morning trading.
Petra, which has been trying to reduce debt while delivering free cash flow, said it is targeting $150 million (120 million pounds) to $200 million (160 million pounds) of free cash flow over the next three years.
The company's net free cash was $17 million in the second half of the year, after adjusting for debt repayments.
"This was a key catalyst that investors had been waiting for, but it could be overshadowed by guidance which is lower than expected, albeit in response to challenging market conditions," BMO Capital analyst Edward Sterck said.
The precious gems miner said it expects full year 2020 diamond output of about 3.8 million carats compared with 3.9 million carats for the year ended June 30, and cut its capital expenditure target for next year to $43 million.
"Polished diamond demand and prices were weaker as the market was challenged by higher than normal polished inventories and tightening cutting-centre bank credit," Petra said as it posted a 5% per carat fall in annual realised diamond prices.
Revenue for the year ended June 30 fell 6% to $463.6 million, below analysts' estimates of $483.2 million, provided by Petra. (https://bit.ly/2Z4vOXZ)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Shounak Dasgupta)
You might also like
Euronews Debates | The South Africa perspective: Can the EU & Africa reboot their relationship?
DRC: a new narrative emerges
