Sales and production sparkled in the first half of the year for Petra Diamonds, but flat rough diamond prices took a toll on revenue.
The diamond and gemstone producer said revenue is expected to increase 48 per cent to $228.5m (£183.5m) in the six months to 31 December due to increased sales volumes. However, it missed analysts' expectations of $236m due to a lower average diamond price.
Production levels increased 24 per cent to 2m carats, while sales increased 47 per cent to 1.9m carats. Like-for-like rough diamond prices were flat relative to the previous half-year results.
Petra said it is on track to deliver full-year production of 4.4m carats to 4.6m carats.
Shares dropped more than two per cent in morning trading.
The FTSE 250-listed diamond firm operates a number of mines formerly owned by De Beers, and in 2016 it made headlines after unearthing a giant 121.26 carat white diamond at the Cullinan mine in South Africa, the site where the gems which adorn the Crown Jewels were discovered.
The company expects stronger sales in the second half of the year as demand grows. Analysts at Canaccord Genuity said certain jewellery retailers reported a slight growth in sales over the Christmas period while others reported narrow declines. However, diamond prices are not expected to lift after a flat first half of the year, Petra said.
Petra also confirmed the group experienced one fatality in its mines during the period, in addition to the four reported in October, "despite historically excellent safety records".
"Safety remains our highest priority at Petra and we are placing renewed focus on this vital area and relentlessly striving for a zero harm workplace," said chief executive Johan Dippenaar.
We continue to advance our expansion programmes and, from this point onwards, will see a meaningful reduction in capex [capital expenditure] as the capital projects, which were first set out in 2009, come to fruition.
Analysts at Liberum said:
The company continues ramp up of operations and remains on track to deliver full year production of 4.4-4.6 million carats.
The smaller diamonds continued to be hurt by the Indian government's demonetisation of high value bank notes and its subsequent liquidity impact on smaller midstream players.