Gemfields suffers R2bn reversal in fortune after emerald, ruby sales reduced to trickle

GEMFIELDS is expected to report a R1.5bn net loss for its 2020 financial year after sales of emeralds and rubies were reduced to a trickle amid the Covid-19 pandemic.

Compared to its profit performance in the comparative year, the 2020 net loss represents a R2bn reversal in fortune for the London- and Johannesburg-listed company.

In dollar terms, a net loss after tax of $93.2m will be reported for the 12 months compared to a $39.1m profit in its 2019 financial year.

“The pandemic has meant that no traditional Gemfields auctions have been held since February 2020, when $11.4m was realised from the sale of commercial quality emeralds in Lusaka,” the company said in a trading statement on Thursday.

Shares in Gemfields fell 18% in Johannesburg yesterday.

The company also said it had impaired investments in Fabergé, the jewellery brand, as well as its stake in Sedibelo Platinum Mines, the latter of up to $29.6m or R442m.

Gemfields has said previously that it was hoping to sell its 6.6% direct stake in Sedibelo Platinum Mines ahead of the company being listed in Johannesburg, possibly in the second quarter.

Commenting earlier this month, Gemfields CEO, Sean Gilbertson, described 2020 as “grisly”, but added there was “palpable excitement” at the prospect of restarting operations.

In its trading statement, Gemfields said the company had held ‘mini-auctions’ of emeralds in November and December, generating $10.9m in revenue. As a result, aggregate auction revenues last year were $22.3m, an 89% ($178.2m) year-on-year decline. There was no ruby revenue in 2020, it said.

Gemfields is due to present its year-end numbers on March 29.

1 COMMENT

  1. With what’s happening in northern Moz, I can just imagine how excited all Sean’s staff must be to return to work at Montepuez! Maybe he should be the first to go there and show us all how safe it is! When the company is taken over in the months ahead from a massively discounted rights issue, some will say “I told you so”!

Comments are closed.