A 25.5-carat blue diamond found at Petra Diamonds’ Cullinan mine in 2013. Picture: SUPPLIED
A 25.5-carat blue diamond found at Petra Diamonds’ Cullinan mine in 2013. Picture: SUPPLIED

Bengaluru — Petra Diamonds shares slid as much as 10% on Monday after lower diamond prices at its flagship Cullinan mine and an increase in net debt took the shine off higher half-year revenue.

The company has been trying to keep a lid on debt after heavy investments and a stronger rand had burdened the miner, which pays in rand and earns in dollars.

Petra's net debt jumped to $557.2m in the six months to December 31 from $538.9m as at September 30. The company was forced to raise $178m last May by issuing equity to cut its debt burden.

Rough diamond prices fell to $96 per carat from $140 per carat in the previous year at the Cullinan mine, which in 1905 yielded the Cullinan diamond — the largest rough gem diamond ever found and now part of the Crown Jewels of the UK.

"The significantly lower realised Cullinan pricing and the impact on cashflow generation sees us take renewed caution," said RBC, which cut the miner's price target to 40 pence from 65p after the company's half-year report.

Petra posted an 8% jump in revenue to $207.1m about 10% below RBC forecasts of $230m, hurt by lower pricing at Cullinan. The company stuck to its production forecast 3.8-million to four-million carats for fiscal 2019.

Shares of the miner, which runs four mines in SA and one in Tanzania, were 8.5% lower at 41.12p at 8.47am GMT.

Reuters