GEM4 Mar 2013 08:09
Gemfields ups output while lowering cost of production
The timing of auctions saw half-year revenues dip at coloured gem stones producer Gemfields (LON:GEM), but the company should pick up the slack in the second half.
The group has three auctions lined up for the second half of its financial year, which should balance out full year revenues, with the group confident that sales throughout the first half of 2013 will be well supported by the expansion of marketing activities across a broader target market.
Revenue in the six months to the end of December 2012 slipped to US$27.7mln from US$45.7mln in the corresponding period of 2011. The group held only one rough auction during the reporting period, as against two in the same period of 2011
Profit before tax was US$9.43mln, against US$30.8mln the year before, while underlying earnings (EBITDA) came in at US$19.5mln, versus US$32.2mln a year earlier.
Cash in hand at the end of the year totalled US$27.9mln, down from US$32.4mln at the end of 2011.
On the operational side, the group achieved a substantial improvement in the average production cost, lowering it to US$0.57 per carat of emerald and beryl from US$0.83 per carat.
In the six month period Gemfields produced 14.5mln carats of emerald and beryl, up from 8.8mln carats the year before.
Since the end of the period the group has completed its acquisition of 100% of the iconic Fabergé jewellery brand and named celebrated actress Mila Kunis as its global brand ambassador.
“We have expanded our footprint substantively with the commencement of the ruby bulk sampling operation in Mozambique, ensured that all of our core projects are well capitalised as and where required, continued to retain healthy cash and stock balances and have finalised the acquisition of Fabergé. We have also, at the same time made good progress on our marketing campaigns and through our collaboration with Mila Kunis, continued to position Gemfields' ethical coloured gemstones as the gemstone of choice," said chief executive officer Ian Harebottle.