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Gem Diamonds' Revenue +54% to $149M in 1H14
Aug 20, 2014 3:58 AM
By Deena Taylor
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RAPAPORT... Gem Diamonds reported that revenue rose 54 percent year on year to $148.9 million in the first half of 2014, driven by an increase in carat volume sales coupled with higher diamond prices. The mining company's profit more than doubled to $19.7 million, while EBIDTA jumped 87 percent to $62.2 million for the period.
The company noted that the first half of 2014 reflected strong demand for rough diamonds from its Letšeng mine, and, in particular, for the mine's renowned large, high-quality diamonds. The company held five Letšeng tenders during the period, achieving $147.8 million or an average price of $2,747 per carat, compared with an average price of $1,741 per carat achieved in the same period one year ago. The fifth tender alone achieved $45.6 million, with an average price of $3,277 per carat. Three diamonds larger than 100 carats, including a 162.02-carat stone, a 161.31-carat diamond and a 132.55-carat diamond, were recovered during the period and achieved a total sales value of $21 million.
Gem Diamonds anticipates that the second half of the year will be characterized by strong price dynamics driven by robust long-term demand from non-traditional markets in Asia and strength in traditional markets alongside limited growth in supply.
Letseng's first-half production rose 29 percent to 54,678 carats, while the volume of sales grew 14 percent. At the end of July, the company recovered a 198-carat, type IIa white diamond.
Meanwhile development of the mine at the Ghagoo mine in Botswana is progressing well and on schedule. The company recovered 2,400 carats as of June 30, including a 20-carat and two 10-carat diamonds. The company noted that the largest diamond recovered at Ghaghoo during the exploration phase was a 7 carat diamond. Gem Diamonds intends to hold its first sale of Ghagoo production before the end of the year.
At the close of the first half, Gem Diamonds had increased its cash on hand to $113.9 million. Consequently, the company's board intends to consider paying a maiden dividend at the end of fiscal 2014.
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Tags:
Deena Taylor, diamonds, Gem Diamonds, Ghagoo, Letšeng
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