Sharp fall in profits at Gem Diamonds

John Jeffay

Gem Diamonds announced a sharp fall in profits for 2019 as it recovered fewer carats and sold them at lower prices.

Profit from continuing operations were $15.0m, down dramatically from $52.4m the previous year.

Revenue and underlying earnings at its Letseng mine, in Lesotho, were also down.

Average value per carat sold was $1,637, compared with $2,131 in 2018.

Key financial results are:

  • Revenue of US$182.0 million (US$267.3 million in 2018)
  • Underlying EBITDA from continuing operations of US$41.0 million (US$87.7 million in 2018)
  • Profit for the year from continuing operations US$15.0 million (US$52.4 million in 2018)
  • Attributable profit from continuing operations US$7.1 million (US$31.7 million in 2018)
  • Earnings per share from continuing operations 5.1 US cents (22.9 US cents in 2018)
  • Cash on hand of US$11.4 million as at 31 December 2019 (US$9.2 million attributable to Gem Diamonds)

The company has renewed its lease on the mine for another 20 years and says this should ensure long-term stability.

It recovered 11 diamonds greater than 100 carats each, as well as a 13.32 carat pink diamond that sold for a Letseng record of  for $8.8m  – $656,934 per carat.

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Source Idexonline