- PRN shares turn red as the company lowers guidance.
- Market conditions haven’t materially improved for Perenti to overcome labour and supply constraints.
- Perenti also reports two fatalities at its subsidiary Barminco’s operations in Botswana.
Today, mining services and surface mining group Perenti Global Limited (ASX:PRN) announced an earnings update for FY22. Perenti confirmed a downward revision to its FY22 revenue and EBITDA (earnings before interest and taxes) data. The company had earlier given its FY22 guidance in February.
Meanwhile, on ASX, PRN share price tumbled in the early hours of trade, edging down 0.69% below the previous close to trade at AU$0.715 apiece by 10:17 AM, AEST.
In another announcement this morning, Perenti reported an incident at its Zone 5 mine in Botswana. Two tragic fatalities were reported for Barminco employees. However, the company does not visualise the material impact of the event on its FY22 guidance.
What changed in Perenti’s FY22 guidance?
Perenti Global Limited’s earnings update reported a change in its FY22 guidance. The company earlier revealed the FY22 guidance on 22 February 2022. Perenti had a revenue expectation of AU$2.2 to 2.4 billion at that time. It anticipated EBIT(A) to be between AU$165 to AU$185 million.
The earlier guidance was based on the expected continuation of labour and supply constraints throughout FY22. Amid no visible material improvements in the market conditions from before, Perenti continues to focus on effective management to overcome these constraints.
However, after recently completing a detailed review of its FY22 forecast and the potential impacts of any incidents, Perenti changed its earnings expectations. The revised FY22 guidance expects an FY22 revenue of AU$2.4 billion and FY22 EBIT(A) to be between AU$170 to 175 million.
PRN share price performance
Holding a market capitalisation of about AU$508.11 million, PRN share price trades in the 52-week price range of AU$0.625 to 1.048 apiece. The annual dividend yield on PRN shares is 7.63% on Monday morning.
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Today in another announcement, Perenti reported two fatalities of its subsidiary Barminco’s employees at its operations in Botswana. Considering the incident at Zone 5, Perenti has made the safety and wellbeing of employees its primary goal. As a result, its earlier announced 2025 strategy update expected in May has been delayed. The company has not yet confirmed the date. However, Perenti is expected to elucidate its capital allocation, portfolio management, and business performance.
For Perenti, the safety of employees is a big criterion as it belongs to the mining services businesses. The Group claims to be one of the world’s largest surface and underground mining services providers. Headquartered in Australia, Perenti operates in around 12 countries and employs about 9,000 mining professionals. Thus, a safety incident seems to have influenced its operational and strategic focus.