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Gemfields Group Ltd on Friday reported profit for the first half of 2023 more than halved as a result mainly of lower sales. The gemstones miner still was able to boost its interim dividend, but it warned that is financial results for all of 2023 will fall short of a ‘standout’ 2023. In London, Gemfields shares fell 7.1% to 13.00 pence on Friday morning. But they were flat in Johannesburg to R 3.26. For the six months that ended June 30, the London-headquartered gemstones miner and marketer saw pretax profit slump by 57% to $36.4 million from $84.8 million a year earlier. Revenue declined by 20% to $153.6 million from $193.2 million, dragging earnings before interest, tax, depreciation and amortisation to $72.9 million, down 30% from $104.8 million. Despite sharply lower earnings, Gemfields lifted its interim dividend to 2.88 US cents, up 69% from 1.70 cents. Earnings per share and headline EPS both plunged to 0.8 cent from 3.7 cents. Gemfields owns 75% of the Kagem emerald mine in Zambia and a 75% interest in Ruby Mining Ltda in Mozambique. It also controls luxury brand Faberge. Recent production at its Kagem emerald mine was lower than the company had hoped, it said. As a result, it has withdrawn its scheduled emerald auction for November 2023 due to lower quality and quantity of emerald production. ‘This is understandably disappointing, but such periods have been seen in the past and we always wish to ensure we have an optimal offering when we bring our gemstones to auction,’ Gemfields said. ‘Given the withdrawal of this auction, we are not presently positioned to match 2022’s standout financial performance in 2023.’ The company said it had started construction at its Montepuez ruby mine of the second processing plant, which is expected to become operational during the first half of 2025. Gemfields warned that it will be difficult to continue a strong financial performance if prices paid for its rough emeralds and rubies soften, particularly given the challenge of controlling costs in this inflationary environment and the decision to cancel the November higher-quality emerald auction. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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