(Alliance News) - Gemfields Group Ltd on Tuesday said it swung to loss in 2020 despite cutting its costs sharply, as production of stones was suspended amid coronavirus pandemic.
The supplier of gemstones reported revenue declined to USD34.6 million in 2020 from USD216.2 million reported the year before. The company said it swung to a net loss of USD93.2 million from USD39.1 million profit in 2019. Pretax loss for the year was USD99.2 million versus USD67.4 million profit in 2019.
Gemfields said the spread of the virus meant that it has been unable to hold auctions in its traditional format since February 2020. This in turn resulted in the company implementing assorted cash saving measures, including suspending operations at the emerald and ruby mines operated by Kagem Mining Ltd and Montepuez Ruby Mining Ltda, respectively.
The total mining and production costs, and selling, general and administrative costs reduced to USD70.2 million during 2020 from USD155.9 million in 2019. Total mining & production costs - excluding mineral royalties, production taxes, export duty and impairment charges and reversals - were USD37.7 million, a 41% fall year-on-year.
The company said it expects both Kagem and Montepuez to be fully operational by the end of April.
"Gemfields faced unprecedented challenges in 2020 as a result of Covid-19 and our full year results reflect the magnitude of the impact," said Chief Executive Sean Gilbertson.
"We believe the difficult decisions taken during 2020 best position Gemfields for an optimal recovery in 2021," added Gilbertson.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Gemfields Grou. (GEM)