JOHANNESBURG (miningweekly.com) – Diamond producer Gem Diamonds posted lower earnings during the first half of the year, but cost control enabled a satisfactory performance, CEO Clifford Elphick said on Thursday.

The London-listed company reported net profit of $15.1-million, down from $24.9-million in the first six months of last year.

Basic earnings a share fell from 10.26c in the six months to June 2012, to 6.23c during the period under review.

The gem producer also delivered lower underlying earnings before interest, tax, depreciation and amortisation (Ebitda) of $33.2-million, compared with the $46-million in the interim period last year.

However, Liberum Capital said in a note to clients that Gem Diamonds’ reported Ebidta and $8.6-million attributable profit surpassed its initial estimates of $18.9-million and $2.3-million respectively.

The positive result should see Gem Diamonds continuing its recent strong performance, Liberum commented.

“Cost control was paramount during this period and it was pleasing that the mine was able to deliver a satisfactory Ebitda margin and bottom line profit,” Elphick commented.

Gem Diamonds’ continued focus on implementing rigorous cost control and cost reduction measures across the business, to adapt to a changing economic environment, had led to a reduction of staff and corporate expenses.

“Reduction in corporate costs should be well received by the market and reflect reduction in staff and corporate expenses. We now expect corporate costs to run at $13-million a year, against $15.6-million in 2012,” Liberum added.

Gem sales reached 47 065 ct during the six-month period under review at an average price of $1 741/ct, generating revenue of $96.5-million.

This was down from the $122.6-million revenue recorded during the first half of last year, from the sale of 58 725 ct at an average price of $2 133/ct.

Gem Diamonds recovered 42 268 ct in the first half of 2013, down 26% on the 57 234 ct recovered in the second half of 2012.