The miner said it expects to produce 4.6 million to 4.8 million carats in 2019, well below the 5.0 – 5.3 million carats it forecast in July last year.
The company, which has been hit by production delays, a confiscated consignment of diamonds in Tanzania and a strong South African rand, warned in May that production would be lower than expected, but did not provide a number.
The forecast spooked investors, overshadowing positive news that the company had managed to keep its debt in check after years of heavy spending.
Its net debt fell to $436.1 million as of June 30 from $513.9 million at the same time last year, the company said.
Total production rose 15% to 4.6 million carats, helped by the ongoing ramp-up of its new Cullinan plant in South Africa, but was still at the lower end of its forecast of 4.6 – 4.7 million carats.
Production at Cullinan rose 74% in the full year, but FinnCap analyst Martin Potts expressed concern on the quality and price of diamonds from the mine.
“Overall price per carat was a long way below expectation as the mine has been recovering less of the higher value stones,” Potts said.
“It suggests that Cullinan may have a problem and therefore may be less valuable as an asset than had previously been thought.”
The company, which operates four mines in South Africa and one in Tanzania, posted a 21% rise in revenue to $576.4 million for the twelve months to June 30 from $477 million a year earlier on higher diamond prices and production.
It said it saw a 2% rise in rough diamond prices on a like-for-like basis during the year, adding that it expects the diamond market to remain healthy.
The company’s business has been weighed by the recent strengthening of the South African rand as well as the confiscation of a consignment of diamonds by the Tanzanian government last year.
Petra said on Monday there was no update regarding its confiscated diamonds in Tanzania.