22nd Sep 2014 09:40
LONDON (Alliance News) - Gemfields PLC Monday said it trebled its revenue and swung to a pretax profit in its recent financial year, due to the addition of its producing ruby project in Mozambique and higher gemstone prices.
The company's revenue trebled to USD160.1 million for the full year ended June 30, from USD48.4 million in the 2013 financial year, swinging it to a pretax profit of USD36.3 million from a USD20.1 million loss in the previous year. It generated USD110 million from emerald and beryl sales during the year.
"In addition to record revenues from our emerald business, the year saw Gemfields hold its inaugural ruby auction of Mozambican rubies, generating sales of USD33.5 million from 1.82 million carats sold," said Chief Executive Ian Harebottle.
"The consistent price increases achieved in our emerald business demonstrate our ongoing commitment to supporting the competitiveness of Zambian emeralds on the international market," he added.
In February 2014, higher quality gemstones attained an average price of USD59.31 per carat, a 10% increase over the previous higher quality auction. In November 2013, its lower quality gemstones sold for an average price of USD3.32 per carat, which was a 27% increase on the previous highest price per carat achieved at a lower quality auction, said Gemfields.
"While Gemfields today enjoys an unrivalled presence in the international coloured gemstone industry, the opportunity for sustained growth is significant. We have built a successful emerald business with our world class Kagem mine in Zambia and the addition of rubies from Mozambique serves to amplify our position as the leading supplier of responsibly sourced coloured gemstones," said Chairman Graham Mascall.
The company said it is looking to increase production at its Kagem mine to 25-30 million carats of emerald and beryl production after a 32.7% reduction to 20.2 million carats of emerald and beryl in the 2014 financial year, from 30 million carats in 2013. The reduction is due to high rainfall and delays, said Gemfields.
It aims to produce 8 million carats of ruby and corundum from its Montepuez ruby deposit in Mozambique, which produced 6.5 million carats of ruby and corundum in 2014, and hold a minimum of three emerald and two ruby auctions to expand its trading footprint over the next year. It also continues to evaluate a number of gemstone acquisition opportunities, it said.
"During the year Gemfields has continued to deliver on its strategy of shaping and consolidating the coloured gemstone industry, demonstrated convincingly by the addition of a significant new revenue stream from our ruby operations in Mozambique," said Mascall.
Gemfield's shares were up 6.1% to 52.00 pence per share Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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