Gemfields, the precious stone miner and owner of Fabergé, decided against paying an interim dividend after a fall in profit as revenue and production declined.
The company, valued at about R4bn on the JSE, said in its results for the six months to end-June that headline earnings per share (HEPS), a common profit measure in SA that excludes certain items, was down 78.4% to 0.8 US cents and the fiscal profit 68% to $18.1m.
“Recent production at our Kagem emerald mine has been lower than we would have hoped, both in quality and quantity. This resulted in our decision to withdraw November’s higher-quality emerald auction from this year’s schedule and bring the available production to market in 2024,” CEO Sean Gilbertson said.
“This is understandably disappointing, but such periods have been seen in the past and we always wish to ensure we have an optimal offering when we bring our gemstones to auction. Given the withdrawal of this auction, we are not presently positioned to match 2022’s standout financial performance in 2023.”
Gemfields operates mines in Zambia and Mozambique and has an interest in other gemstone mining and prospecting licences in Ethiopia and Madagascar.
Revenue fell 20.5% to $154m, core earnings, or earnings before interest, taxes, depreciation and amortisation (ebitda), 30.4% to $73m and free cash flow dropped 70.9% to $25.2m
Looking ahead, Gemfields has started construction of its second processing plant at the Montepuez ruby mine in Mozambique. According to the company, it is its largest investment and the “game-changer” is expected to become operational in the first half of 2025.
“Once operational, this second processing plant will be transformational for the group and should see a near tripling of ore processing capacity” at the Montepuez Ruby Mining (MRM) in Mozambique, chair Martin Tolcher said.
“Doing so will allow MRM to build up its inventory of rubies, explore more of its licence area and enter new markets for different sizes and colours of ruby products that have not previously been economically viable to process at scale.”
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