Gemfields doubles interim profit as auctions return to normal service

Sean Gilbertson, CEO, Gemfields

GEMFIELDS said in a trading statement today it expected to report a taxed interim profit of $56.7m for the period ended-June 30 after its normal roster of auctions resumed. It posted an interim profit of $23.8m for the corresponding period last year.

Auctions were badly disrupted in 2020 and 2021 following the outbreak of the Covid-19 pandemic when international travel ground to a halt.

The company’s mines – the Kagem emerald mine in Zambia and Mozambique’s ruby mine Montepuez (MRM) – registered revenues of $85.2m and $95.6m respectively. Two emerald auctions were held in the period and one ruby auction.

“Following on from the strong auction results in the second half of 2021, the auctions held in the first half of 2022 saw a continuation of the robust demand for coloured gemstones with record auction revenues and per carat prices being realised,” said Gemfields.

The outcome for shareholders is interim headline share earnings of three US cents (56 SA cents/share) which compares to two cents for the corresponding period last year. The headline earnings include a $4.2m write down to $33m of Gemfields’ shares in Sedibelo Resources, a platinum group metals (PGM) producer.

The write-down was owing to “uncertainty in the market putting downward pressure on the enterprise values of Sedibelo and its peer group”, said Gemfields. Shares in Impala Platinum and Anglo American Platinum (Amplats) are down 25% and 41% respectively as the PGM basket price comes off record highs last year.

Fabergé recorded $9.5m in revenue compared to $4.9m previously, partly driven by stronger wholesale sales.

Gemfields is due to report its interim numbers on September 29.