Perenti shares slump as wages, $AU soar

Shares in Perenti have tumbled today as the mining services business informed shareholders that wage growth, high turnover and a strong Australian dollar were impacting the business’ financial outlook.

That news, delivered in an operational update to the market earlier today, comes at the same time as the business announced it had received more than $700 million of contracts since the start of the calendar year.

While that portended further growth in the North American market, Perenti managing director Mark Norwell said the strengthening value of the Australian dollar and upwards pressure on wages caused by a tight labour market were creating a challenging operational backdrop.

Perenti’s earnings are expected to decrease by $1.4 million on annualised basis due to the higher than expected average daily rate for the dollar.

“We have done well to manage the controllable aspects of the business however the cumulative impact and forecast persistence of the current headwinds has resulted in a softening of the outlook for FY21 and FY22,” Mr Norwell said.

“We are also confident that we will continue to manage the acute impacts of the current challenges to deliver on our growth aspirations while providing consistent, high quality operational performance and generate long term value for Perenti shareholders.”

Perenti began trading at 85 cents and dropped to as low as 69 cents over the course of the day.