Gem Diamonds, which owns 70% of the Letšeng mine in Lesotho recorded underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $43.7 million in the year ended 31 December 2022 compared to $57.4 million in 2021.
This follows a drop in revenue during the same period to $188.9 million from $201.9 million in 2021.
Gem viewed its financial performance as “solid” in the face of the volatile global economic environment following the conflict between Russia and Ukraine, which caused high diesel prices, inflation and interest rates.
The consumption of diesel was further increased by the grid electricity interruption due to power cuts by the national power utility Eskom.
According to Gem Diamonds chief executive Clifford Elphick, Gem has delivered solid operational and financial results in light of the challenges brought about by the conflict between Russia and Ukraine.
“This directly impacted our operating costs, in particular diesel prices, and interrupted supply chains. This was exacerbated by the increased Eskom load shedding which caused an increase in the use of diesel-powered generators.”
Meanwhile, the group produced 106 704 carats in 2022 compared to 115 336 carats in 2021.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
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