Gem Diamonds on track to meet full-year guidance despite challenges
London-listed Gem Diamonds recovered 55 157 ct of diamonds in the six months ended June 30, compared with the 56 504 ct recovered in the prior half-year period.
Diamond sales of 57 075 ct were, however, higher than the 54 573 ct sold in the prior comparable period.
The company generated revenue of $99.6-million in the six months under review, and achieved an average price of $1 745/ct, both slightly lower compared with the prior half-year.
Gem sold 15 diamonds for more than $1-million each in the six months under review, while three diamonds greater than 100 ct were recovered in the period.
The company ended the half-year with $24-million cash on hand, with drawdown facilities of $12-million due, resulting in a net cash position of $12-million. Gem still has just under $70-million of available lending facilities.
Gem managed to buy about 1.5-million of its own shares at a weighted average price of $0.78 apiece under its share buyback programme.
CEO Clifford Elphick says there is still firm demand for the high-quality diamonds produced at the company Letšeng operation, in Lesotho.
“We are managing the economic impact of global events which are contributing significantly to the slowing down of global economic growth and which are materially impacting energy and commodity prices and disrupting supply chains worldwide.
“The sanctions imposed on Russian diamond producer Alrosa have exacerbated a shortage of rough diamonds in the market, supporting continued strong demand and robust prices for high-quality rough diamonds,” he points out.
Despite Letšeng having experienced excessive rain, increased power disruption and supply chain challenges in the six months under review, the company remains on track to achieve its full-year production guidance of between 112 000 and 116 000 ct.
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