Sharp Fall in Profits at Gem Diamonds
March 12, 20
(IDEX Online) - Gem Diamonds announced a sharp fall in profits for 2019 as it recovered fewer carats and sold them at lower prices.
 
Profit from continuing operations were $15.0m, down dramatically from $52.4m the previous year.
Revenue and underlying earnings at its Letseng mine, in Lesotho, were also down.
Average value per carat sold was $1,637, compared with $2,131 in 2018.
Key financial results are:
• Revenue of US$182.0 million (US$267.3 million in 2018)
• Underlying EBITDA from continuing operations of US$41.0 million (US$87.7 million in 2018)
• Profit for the year from continuing operations US$15.0 million (US$52.4 million in 2018)
• Attributable profit from continuing operations US$7.1 million (US$31.7 million in 2018)
• Earnings per share from continuing operations 5.1 US cents (22.9 US cents in 2018)
• Cash on hand of US$11.4 million as at 31 December 2019 (US$9.2 million attributable to Gem Diamonds)
The company has renewed its lease on the mine for another 20 years and says this should ensure long-term stability.
It recovered 11 diamonds greater than 100 carats each, as well as a 13.32 carat pink diamond that sold for a Letseng record of for $8.8m - $656,934 per carat.
CEO Clifford Elphick said: "Gem Diamonds delivered solid operational results which together with the targeted gains of the business transformation programme and continued emphasis on cost controls, confirmed our status as one of the lowest-cost producers in the industry."