(Alliance News) - Gem Diamonds Ltd on Wednesday reported a full-year earnings decrease with carats recovered also falling, and the average value slipping.
In 2019, revenue was down by almost a third to USD182.0 million from USD267.3 million, the gem producer said.
Pretax profit from continuing operations was 69% lower at USD24.1 million from USD78.7 million.
Carats recovered from its Letseng diamond mine in Lesotho fell 10% to 113,974 from 126,875.
Average value slipped 23% to USD1,637 per carat from USD2,131.
"The challenging operating and market conditions in 2019 required Gem Diamonds to demonstrate its resilience. The prolonged weakness in the rough diamond market affected producers across the industry. Drivers underlying this trend included an oversupply of rough diamonds and funding issues affecting buying patterns in the middle market. While the prices achieved for Letseng's high-quality goods had held up in 2017 and 2018, during 2019 prices were impacted by the overall weakness in the market," Gem Diamonds explained.
The amount of diamonds recovered which were larger than 100 carats also fell in 2019, to 11 diamonds, from 15 in 2018.
Chief Executive Officer Clifford Elphick said: "Gem Diamonds delivered solid operational results which together with the targeted gains of the Business Transformation programme and continued emphasis on cost controls, confirmed our status as one of the lowest-cost producers in the industry."
The company said its Business Transformation scheme has secured USD55 million in savings to date, leaving it on track to deliver cost cuts of USD100 million the end of 2021.
Shares in the company were untraded in London on Wednesday morning, last quoted at 48.25 pence each.
By Eric Cunha; ericcunha@alliancenews.com
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Gem Diamonds Di (GEMD)