The demand for rough emeralds and rubies remained healthy, while production of the highest-quality gemstones at both mines over this period was below the Group’s expectations. Kagem’s production in August saw a considerable uptick alongside the completion of its upgraded processing plant while MRM continues to be challenged by weaker gemstone production.
Fabergé recorded revenues of USD 6.6 million (2023 H1: USD 8.4 million) in a softer luxury-goods market and against a comparative 2023 H1 period that included a one-off sale of legacy jewellery.
Gemfields’ 6.54% shareholding in Sedibelo Resources Limited (Sedibelo), the platinum group metals (PGM) company, has now been written down to nil from USD 4.0 million at the end of 2023.
The write-down reflects the fact that there has been no further positive news from Sedibelo, that their operations remain suspended and Gemfields management’s view that the prospects in the medium term remain dim. The Sedibelo stake is non-core to the Gemfields business.
Gemfields is reasonably certain that, after taking this write-down into account, its net profit after tax will be USD 13.7 million for the six months ended 30 June 2024 (2023 H1: net profit after tax of USD 18.1 million). In ZAR terms, the net profit after tax is expected to be ZAR 255.6 million (2023 H1: net profit after tax ZAR 333.7 million).
The lower profit is driven by the lower revenues and higher costs at both operations, the Sedibelo write-down and an increase in net financing costs as the Group’s debt increases to help fund the construction of MRM’s second processing plant.
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