3rd Oct 2013 09:05
LONDON (Alliance News) - Gemfields PLC Thursday said it swung to a pretax loss in its full year as lower sales and higher costs hit the company.
The rare coloured gemstones mining company with operations in Zambia said it made a pretax loss of USD20.1 million for the twelve months ended June 30 compared to a pretax profit of USD248.9 million the previous year.
The company said sales fell 42% to USD48.4 million from USD83.7 million as the Zambian Ministry of Mines asked the company to host its gem auctions in Zambia rather than abroad, causing significant disruption to its sales plans and leading to only one auction being carried out in the second half of the financial year.
Gemfields said it is in discussions with the Government of Zambia to find a better selling strategy for its gems.
The company also said its cost of sales increased to USD34.7 million from USD22.0 million as increased production costs and depreciation of assets hit company finances.
Gemfields also noted that it made an extraordinary gain of USD201.1 million on an impairment reversal in 2012 which skewed the figures.
The company also said that its annual production of emerald and beryl from its subsidiary Kagem Mining Limited increased 42% to 30.0 million carats from 21.1 million carats and that, as gemstone prices continue to increase, the company expects to significantly develop in 2014.
During the period, the company completed the acquisition of 100% of the Faberge jewellery brand and has appointed the actress Mila Kunis as its brand ambassador, wearing its coloured gemstones on the red carpet at several premiers.
Gemfields shares were down 2.7% to 25.30 pence Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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