JSE-listed Gemfields expects its net profit after tax for the year ended December 31, will be $39.1-million compared with a net loss after tax of $60.4-million in the 2018 financial year.
In rand terms, the net profit after tax is expected to be R565-million.
Earnings a share are expected to be $0.02 for the period under review, compared with a loss a share of $0.05 in 2018.
Gemfields’ two key operating assets, Montepuez Ruby Mining and Kagem, generated revenues of R121.5-million and $79-million respectively during period, and Fabergé recorded revenues of $10.5-million.
Given the recent suspension of the 15% export duty payable in Zambia throughout 2019, an impairment reversal of $21.6-million has been recognised against the company’s Kagem asset.
During the period, Gemfields entered into an agreement to sell its entire stake in Jupiter Mines. The sale is structured in two phases, with the first phase completed in June 2019 and the second phase completed in November 2019 and the group receiving a total of $30.4-million in sale proceeds across both phases.
Gemfields additionally received a dividend from Jupiter of $2.6-million and recorded mark-to-market gains of $4.6-million from its Jupiter holding during the period owing to a rise in the Jupiter share price from the beginning of the period.
A review of Gemfields’ shareholding in Sedibelo Platinum Mines has resulted in a fair value gain of $7.1-million.
Excluding the impairment charges at Kagem and other Gemfields subsidiary companies, and including the fair value gains in Jupiter and Sedibelo, headline earnings a share are expected to be $0.01 for the period under review.
COVID-19 UPDATE
Owing to the current global travel restrictions, Gemfields said it could not be certain when or if the ruby and emerald auctions scheduled for the coming months would take place.
Consequently, it could not provide guidance in relation to revenue generation and overall financial performance for the remainder of this year.