Gemfields' two key operating assets, Kagem Mining and Montepuez Ruby Mining (MRM), are expected to generate combined revenues of $120.6 million in the six months to 30 June 2024 compared to $145 million a year earlier.
Of this, Kagem and MRM generated revenue of $51.9 million and $68.7 million, respectively.
It said although its revenue fell, demand for rough emeralds and rubies remained healthy, while production of the highest-quality gemstones at both mines was below the group's expectations over this period.
However, Kagem's production in August grew considerably alongside the completion of its upgraded processing plant, while MRM continued to be challenged by weaker gemstone production.
“This month we experienced a weaker-than-expected commercial-quality emerald auction,” said Gemfields chief executive Sean Gilbertson.
“While this increases the uncertainty we face, management considers it unlikely that the November higher-quality emerald auction or the December mixed-quality ruby auction will see below-par results of a similar scope.”
Meanwhile, the company said its net profit after tax will be $13.7 million for the six months ended June 30, 2024, compared to the previous year’s $18.1 million.
It said the reduced profit was due to lower revenues and higher costs at both operations, the Sedibelo write-down and an increase in net financing costs as the group's debt increased to help fund the construction of MRM's second processing plant.
"While higher-quality gemstones typically remain more robust than lower-quality gemstones in challenging times, we remain vigilant given that the luxury and gemstone sectors are facing greater uncertainty than we have seen in the last three years,” said Gilbertson.
Mathew Nyaungwa, Editor in Chief, Rough&Polished
