Gemfields sinks into a loss due to Covid

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Gemfields sinks into a loss due to Covid

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Published Date: 2021-03-31 | Source: Stephen Gunnion | Author: Stephen Gunnion

Gemfields sinks into a loss due to Covid

The precious stones group believes the tough decisions taken in 2020 position it for an optimal recovery this year.

Gemfields has slumped into a full-year loss after it wasn't able to hold precious stones auctions in their normal format for most of 2020. But it says it's positioned for a recovery this year.

The group, which has interests in emerald and ruby mines in Africa and owns luxury goods group Fabergé, said it implemented various cost saving measures in response to the Covid-19 restrictions, including suspending operations at its emerald and ruby mines. It introduced multi-city mini-auctions, combined with a new online bidding platform, that it said provided important flexibility until travel and congregating restrictions eased.

Gemfields operates and owns a 75% stake in Zambia's Kagem emerald mine, believed to the world's single largest producing mine of the precious stones, and a 75% interest in the Montepuez Ruby Mine (MRM) in Mozambique, which it describes as one of the most significant recently discovered ruby deposits in the world. It also holds controlling interests in various other gemstone mining and prospecting licenses in Zambia, Mozambique, Ethiopia and Madagascar. It uses its outright ownership of Fabergé to optimise positioning, perception and consumer awareness of coloured gemstones, advancing the wider group's "mine and market" vision.

For the year to end-December, revenue fell 84% to $34.6-million and it reported an operating loss of $24.5-million, down from an operating profit of $91.6-million in 2019. That resulted in a net loss of $93.2-million, from profit of $39.1-million, and a headline loss per share of 6 US cents, down from earnings of 1c previously. It ended the year with net debt of $12.6-million from net cash of $25.4-million a year earlier.

Gemfields said it expected both Kagem and MRM to be fully operational by the end of April.

Its shares closed 5.4% lower at R1.40 in thin trade yesterday.





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