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Gem Diamonds' 2012 Revenue -34%, Loss at $77M
Mar 12, 2013 4:46 AM
By Avi Krawitz
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RAPAPORT... Gem Diamonds reported that revenue fell 34 percent year on year to $202.1 million in 2012 despite achieving record production at its flagship Letšeng mine. The average price for rough diamonds sold from Letšeng fell approximately 15 percent during the year as the Eurozone crisis and global financial uncertainty persisted with even sharper declines in certain categories, the company explained.
The group posted a loss of $76.5 million for the year compared with a profit of $34.8 million the previous year, with losses incurred from discontinued operations amounting to $118.7 million. Attributable profit before exceptional items fell 72 percent to $17.1 million.
The company sold its Ellendale mine in January 2013 and also recently terminated its participation in the Chiri project in Angola, both contributing to the losses from discontinued operations. Clifford Elphick, Gem Diamonds’ CEO, explained the company’s strategy will focus on its Kholo expansion project at Letšeng and developing the Ghaghoo mine in Botswana. The first ore production at Ghaghoo is expected in mid-2014.
In 2012, the company sold 107,617 carats of diamonds from Letšeng for an average $1,932 per carat, down from $2,776 per carat the previous year. Production at the mine rose 2 percent year on year to 114,350 carats. The average price of Ellendale production fell 2 percent to $720 per carat with its Ellendale yellow stones sold to Tiffany & Co. holding basically steady at an average price of $4,393 per carat.
Elphick reported that the first Letšeng tender in 2013 saw 16,188 carats of rough selling for $27.9 million, or $1,723 per carat. Despite the lower average price, he noted that the results were encouraging given the sale was comprised entirely of production from the lower-value pipe. “The outlook for the diamond industry is showing signs of improvement,” Elphick added.
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Tags:
Avi Krawitz, diamonds, Gem Diamonds, Letseng, Rapaport, Tiffany & CO.
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