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Gemfields' 1H Revenue Soars, Profit Declines
Mar 3, 2014 6:39 AM
By Deena Taylor
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RAPAPORT... Gemfields plc reported that its revenue soared 137 percent year on year to $65.7 million during the six months that ended on December 31, 2013. The company attributed the rise to strong demand at its three emerald and beryl auctions that were held over the period, coupled with revenue from its jewelry business Fabergé, the direct sale of low-quality beryl and the sale of cut and polished gemstones.
However, profit fell 70 percent to $1.4 million. The company had $14.8 million cash in hand, while its inventory at the end of the period was valued at $69.3 million.
During the period, emerald production at the company's Kagem mine in Zambia fell 28 percent year on year to 10.4 million carats as a result of higher production costs. In December 2013, the company distributed its first ever dividend of $8.8 million of which $2 million was paid to the government of Zambia for a 25 percent stake in the mine.
"Gemfields' next chapter as a leading producer, marketer and retailer of emeralds, rubies and other precious colored gemstones is set to be accelerated in the short term and we look forward to building on our successes to date, underpinned by our broadening footprint, encouraging consumer demand and our exceptional team, to whom I am eternally grateful," said Gemfields' CEO, Ian Harebottle.
Harebottle noted that demand for colored gemstones remained upbeat, as indicated by the record per-carat prices the company achieved at its auctions.
Last week, the company achieved record revenue of $36.5 million and a record average price per carat of $59.31 from a high-quality emerald auction held in Lusaka. The company plans to hold an additional emerald auction and its first ruby auction of production from its 75 percent owned Montepuez ruby deposit in Mozambique during the second half. Montepuez produced 5.1 million carats of ruby and corundum during the six-month period, taking the total amount of ruby and corundum extracted to 7 million carats.
The company will continue to implement its "mine and market" strategy through its most recent campaign at Faberge, which experienced strong Christmas sales. Revenue derived from sales and sales orders agreed during the month of January continued the trend experienced in December 2013 and rose 198 percent year on year. The company plans to debut new collections during the second half. The group also appointed Robert Benvenuto as president and chief operating officer.
Gemfields' chairman, Graham Mascall, said, "The Fabergé brand continues to play its part in the increasing demand outlook for colored gemstones right alongside Gemfields' own marketing endeavors, led by our brand ambassador, Mila Kunis."
During the period, Gemfields' partnership with the actress saw increased visibility with the advertising campaign running from March to December in luxury consumer titles, digital and trade publications in the U.K., U.S., India, South Africa and Zambia.
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Tags:
Deena Taylor, emerlads, Fabergé, Gemfields, Kagem, Montepuez, rubies
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