Gem Diamonds says its business transformation (BT) programme remains on track to deliver the targeted $100 million in revenue, productivity and cost saving measured against the 2017 base.
The BT programme has, since its inception, delivered $65.0 million, net of fees and costs, to the group’s results.
Gem Diamonds said the successful implementation of the BT initiatives over the past two years had placed the group in a stronger position to absorb the external shock of the Covid-19 pandemic.
“Although the cumulative target of $100 million remains on track, the expected delivery by end 2021 may need to be extended into H1 2022 after taking into account the full impact of the shutdown and subsequent reduced operations in Q2 2020,” said Gem Diamonds.
The company was targeting to save $30 million per year.
Meanwhile, Gem Diamonds said the reopening of key players in the diamond industry, in particular the manufacturing sector in India and jewellery stores across the globe, is gradually taking place as lockdown restrictions are eased.
It said positive signs of increased demand for diamond jewellery from China during the period was also encouraging.
The Covid-19 pandemic significantly impacted the diamond industry, from mining through to retail, with lockdown regulations and travel restrictions imposed across the world.
Total global rough diamond supply was estimated to decrease to about 110 million carats in 2020 compared to 141 million carats in 2019.
This was largely due to a combination of planned mine closures, Covid-19 driven marginal mine closures, suspension and slowdown of certain operations and the cancellation of scheduled sales by De Beers and Alrosa.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
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