News

Advanced Search

Gem Diamonds Profits Rise 43% in 2010

Mar 15, 2011 4:48 AM   By Avi Krawitz
Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share
RAPAPORT... Gem Diamonds reported that net profits rose 43 percent to $36.2 million in 2010 and group revenues increased 9 percent to $266.4 million, driven by higher rough prices achieved in the fourth quarter. 

“During the year Gem Diamonds benefitted from the continuing recovery in rough and polished diamond prices and from the implementation of its new sales and marketing strategies,” said company chairman Roger Davis. “In the last quarter of the year prices for both Letšeng’s run of mine production and Ellendale’s fancy yellow diamonds achieved record prices.”

The rise in sales was achieved despite a 13 decrease in volumes sold at Gem Diamonds’ flagship Letšeng mine in Lesotho to 88,564 carats. The average price of Letšeng stones rose 40 percent year on year to $2,149 per carat in 2010. The average price in the fourth quarter was $3,291 per carat due to the roll out of Gem Diamonds’ new in-house marketing strategy, rising market prices and the sale of three exceptional white diamonds weighing more than 100 carats each.

Similarly, production sold at the Ellendale mine in Australia fell 48 percent year on year to 163,924 carats while the average price of the diamonds rose 105 percent to $475 per carat.

Gem Diamonds reported that rough prices continued to rise in 2011 due to perceived shortages, while polished prices and volumes of trading have also increased.

The company reasoned that rough prices have risen as manufacturing in India has returned to pre-downturn levels; more credit was made available to the cutting centers; demand continued to rise in China and India, and reports indicated strong demand for diamond jewelry during the U.S. Christmas period.

“This is already having an impact on rough diamond prices as retailers restock at the beginning of 2011,” the company reported. “Current market reports suggest that polished prices were actually undervalued and are now beginning to benefit from the underlying supply demand dynamic.”

Gem Diamonds shares were trading down 5.7 percent at 245 pence in Tuesday morning trade on the London Stock Exchange.

Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share
Tags: Avi Krawitz, Ellendale, Gem Diamonds, Letseng, Rough diamond prices, Rough markets
Similar Articles
Comments: (0)  Add comment Add Comment
Arrange Comments Last to First
© Copyright 1978-2021 by Rapaport USA Inc. All rights reserved. Index®, RapNet®, Rapaport®, PriceGrid™, Diamonds.Net™, and JNS®; are registered TradeMarks.
While the information presented is from sources we believe reliable, we do not guarantee the accuracy or validity of any information presented by Rapaport or the views expressed by users of our internet service.