Petra Diamonds slumps 10% on revenue warning

Shares in Petra Diamonds slumped 10% on Friday after the company said that full-year revenues are likely to be lower than expected due to reduced prices for diamonds.

Petra said it now expects to report revenue of $430m, which is below market expectations of about $450m.

“The lower incidence of high quality stones and higher volumes of smaller diamonds reduces the average prices achieved on sale,” the company said.

Investec said "the news highlights the near-term challenges as the company mines from old and exhausted infrastructure and faces diluted ore problems".

Still, it remains optimistic due to the supply and demand fundamentals of diamonds and the quality asset base that is being effectively re-developed.