Downgraded revenue and the search for a missing worker saw the Perenti share price plummet last month
The post Why did the Perenti (ASX:PRN) share price fall 38.5% in May? appeared first on The Motley Fool Australia. –
The Perenti Global Ltd (ASX: PRN) share price had a terrible run in May, falling by a massive 38.5%. Shares in Perenti began the month trading for $1.09. However, by the end of the month, they were swapping hands for 67 cents.
Let’s take a look at the month that was for the diversified mining company’s share price.
An unfortunate time for the Perenti share price
The Perenti share price fell 9% between the end of April and when the company released news for the first time in May.
Revenue and earnings downgrade
In its first release of the month, Perenti downgraded its revenue and earnings guidance for the 2021 and 2022 financial years. Though, Perenti didn’t specify how much the company’s earnings are expected to fall.
The company blamed the downgrade on 3 happenings.
First, travel restrictions due to COVID-19 and an on-site shutdown caused by an outbreak of the virus have lowered Perenti’s production rate.
Perenti has also had to increase its worker’s wages amidst a labour shortage.
Finally, it stated the strengthening of the Aussie dollar will cause a $1.4 million annual hit to Perenti’s earnings before interest and tax.
The downgrade caused the Perenti share price to close 29.5% lower than it did in the previous session.
On May 21, Perenti updated the market with the awful news that an employee of its joint venture had gone missing during a fall-of-ground in one of the Obuasi Gold Mine’s mining stopes.
The fall of ground occurred on 18 May. All work at the mine was halted for a search and rescue operation.
AngloGold Ashanti CDI (ASX: AGG), the owner of the mine, stated rescue teams were working around the clock in difficult geotechnical conditions to find the employee.
The worker was employed by the Underground Mining Alliance (UMA). UMA is a joint venture between Perenti’s subsidiary, African Underground Mining Services, and Rocksure, a Ghanaian contracting company.
On May 27, Perenti shared the news that the worker still hadn’t been found. Work at the mine was still halted while the search continued.
AngloGold stated it was supporting the family of the worker, and Perenti said it was helping AngloGold to do so.
Perenti Global share price snapshot
The poor month’s performance has added to the Perenti Global share price’s troubling 2021 on the ASX.
Currently, the Perenti Global share price has fallen by 52% since the start of the year. It’s also fallen by 51% over the last 12 months.
The company has a market capitalisation of around $471 million, with approximately 704 million shares outstanding.
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