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LONDON (Alliance News) - Precious metals company Gemfields PLC on Monday reported a surge in pretax profit for 2014 on the back of higher revenue but lower costs.
Gemfields said its pretax profit for the year was USD43.5 million, compared to USD7.8 million a year earlier.
Revenue increased to USD103.4 million from USD65.7 million a year earlier, but its cost of sales fell to USD35.6 million from USD37.6 million a year earlier.
Emerald and beryl production from the Kagem mine in Zambia, in which Gemfields owns a 75% stake, was 12.1 million carats, up from 10.4 million last year. Average grade slipped to 202 carats per tonne from 267 carats in 2013. The company raised USD15.5 million from an emerald and beryl auction in August and raised a further USD34.9 million from an auction in November.
Ruby and corundum production from the 75% owned Montepuez Mining Ltd in Mozambique also increased in the year, up to 6.3 million carats from 5.1 million carats a year earlier, though average grade also fell, to 37 carats per tonne from 86 carats per tonne. The company raised USD43.3 million from an auction held in Singapore in December.
The company said the value of sales from its Faberge Ltd unit rose in the year by 2.4%, with losses narrower in the business despite a material decrease in sales in Ukraine and Russia.
"This solid performance comes at a time when the mining sector has faced various challenges, but I am pleased to report that demand for Gemfields' responsibly sourced coloured gemstones and the opportunity for sustained growth remains significant," said Gemfields Chief Executive Officer Ian Harebottle.
Shares in Gemfields were trading down 1.0% at 50.00 pence on Monday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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