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(Bloomberg) -- Danish charm-bracelet maker Pandora A/S forecast lower profitability this year as higher gold and silver prices make jewelry production more expensive.

Pandora also announced plans for bonus dividends and a share buyback of as much as 1.6 billion Danish kroner ($230 million) in a statement Tuesday. The Glostrup-based company warned the margin for earnings before interest, tax, depreciation and amortization will be “significantly” lower in the first half and will be about 38 percent for the full year. That’s down from 39.1 percent in 2016.

Pandora said first-quarter revenue growth will decelerate to less than 10 percent from the 21 percent increase in 2016 amid a difficult comparison with a strong period last year. Chinese consumers are increasingly turning to more affordable jewelry amid the economic slowdown and an anti-extravagance campaign, Bloomberg Intelligence analysts Deborah Aitken and Maja Rakic said in a note.

The company, which rebounded from a profit-forecast miss in the second quarter, is expanding manufacturing operations, aiming to double production to more than 200 million pieces a year by the end of 2019.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net. To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Thomas Mulier

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