Gemfields H1 earnings slump to $19.5m on fewer auctions
Aim-listed gemstone miner Gemfields on Monday reported earnings before interest, taxes, depreciation and amortisation of $19.54-million for the half-year ended December 31, 2012.
This was down from the $32.44-million posted for the comparative 2011 period.
Gemfields’ after-tax net profit also dropped from its 2011 figure of $22-million to $4.74-million for the half-year.
Revenues from a rough and finished emerald auction in November resulted in sales of some $27.68-million – a substantial slump on the $45.73-million sold in the six months ended December 2011, which Gemfields CEO Ian Harebottle attributed to the timing of the auction itself.
“While the timing of our auctions has resulted in lower first-half revenues, the three auctions lined up for the second half are expected to balance out the financial year revenues,” he said.
Meanwhile, the company increased emerald and beryl production from 8.8-million carats in the half-year ended December 2011 to 14.5-million carats for the period under review, owing chiefly to increased waste stripping at its Zambia-based Kagem operation, which allowed for an increase in the volume and grade of ore mined.
Further, the average production cost decreased from $0.83/ct to $0.57/ct.
Exploration at the company’s newly acquired 75%-owned Montepuez ruby mine, inMozambique, continued during the half-year, with the start of preliminary bulk sampling in August and the commissioning of a 50 t/h wash plant.
A total of 109 120 ct of ruby were discovered at the Montepuez mine during the six months.
Meanwhile, the company completed its acquisition of the Fabergé jewellery brand during the period, allowing it direct control over a high-end luxury goods platform for its product.
Looking ahead, Gemfields said it would renew its focus on increasing production at all operating mines, with sales expected to remain well supported by the expansion of marketing initiatives across a broader target market.
Gemfields CEO Ian Harebottle