3rd Mar 2014 10:19
LONDON (Alliance News) - Gemfields PLC Monday said its pretax profit fell significantly in its first half as costs and administrative expenses offset a large increase in sales.
The rare coloured gemstones mining company, with operations in Zambia and 100% ownership of Faberge Limited, said its pretax profit fell to USD1.4 million for the six months ended December 31, 2013, from USD4.7 million in the previous year despite more than doubling its revenues to USD65.7 million from USD27.7 million in 2012.
The company said its revenues increased as it received higher sales from Faberge during the key seasonal shopping month of December and the company achieved record per-carat prices during the overall period. However, higher cost of sales, at USD37.6 million from USD9.6 million the previous year, offset some of its overall gain in revenues.
Gemfields said its administrative expenses increased to USD19.9 million from USD8.2 million the previous year as the company continued its development and the integration of Faberge Ltd.
The company also said production at its 75% owned Kagem Mining Ltd fell to 10.4 million carats of emerald and beryl from 14.5 million carats in 2012 and that the grade of the gems fell slightly to 267 carats per tonne from 271 carats per tonne the previous year.
Gemfields said in February that illegal mining activity within the boundary of its Kagem licence has not yet been resolved, and the company continues to work with key ministries in Zambia to try and solve the problem.
The company said demand for coloured gemstones remains strong, and it plans to accelerate its development in the short term.
Gemfields shares were down 0.2% to 35.68 pence Monday.
By Tom McIvor; [email protected]; @TomMcIvor1
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Gemfields Grou.