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Interim Results

Gem Diamonds underlying earnings fall

17 August 2017 07:27

Gem Diamonds' underlying EBITDA fell to $13.0 million in the six months to the end of June - down from US$43.5m last time.

Revenue fell to $92.9m from $109.1m and attributable net profit, before exceptional items, was $49k (US$13.4 million attributable net profit, before exceptional items, in H1 2016).

Chief executive Clifford Elphick said: "The improvement in the greater than 100 carat diamond recoveries at Letseng is encouraging with the US dollar per carat achieved trending positively at US$1 779, up 20% from US$1 480 in H2 2016.

"The latest sale in July achieved US$2 385 per carat.

"The updated life of mine plan was implemented during the Period with the objective of reducing waste tonnes mined and improve near term cash flows, and mining progressed well against this plan during the Period.

"At Ghaghoo, the mine was successfully placed on care and maintenance during the Period which will result in further cost optimisation during the remainder of the year.

"Shareholders are advised that an offer to acquire 100% of the Ghaghoo asset has been received and the Board is considering the offer.

"The cost reduction and transformation programme is firmly underway and at this early stage US$15 million of annualised efficiency and cost reduction initiatives have already been identified for implementation from October 2017."

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