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Gemfields Group Ltd expects to turn profit in 2021 as a result of record-breaking gemstone auctions last year, underpinning a recovery from Covid-19.
The London-headquartered gemstones supplier said on Tuesday it expects earnings per share to be 4.0 US cents in 2021, swinging from a loss of 7.0 cents in the prior year. In 2019, earnings stood at $2.0 cents per share.
In rand terms, the earnings per share are expected to be 0.64 rand cents, compared to a loss of 1.20 cents. Earnings remained at 0.32 cents in 2019.
In its annual earnings guidance, Gemfields said net profit after tax will grow to $65.0 million, swinging from a loss of $93.2 million. In rand terms, the net profit after tax is expected to rise to R 961 million, from a R 1.53 billion loss.
Gemfields' two key operating assets, Montepuez Ruby Mining Limitada and Kagem Mining Ltd, saw record-breaking auction results in 2021, generating revenues of $147.4 million and $91.8 million respectively.
The company's 2020 auction schedule was severely hampered by the many travel, quarantine and congregating restrictions put in place internationally to mitigate Covid-19 contagion.
Gemfields had to adapt and find alternative ways of hosting gemstone auctions. After the success of its inaugural series of smaller, multi-city, online-based auctions for high-quality emeralds in November and December 2020, it continued with the same format for its auctions of emeralds and rubies in 2021.
Shares in Gemfields were up 8.6% at 17.10 pence on Tuesday morning in London, while its Johannesburg shares were 8.5% higher at R 3.45.
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