Gemfields slumps 13% as it flags softer luxury market, platinum downturn

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News of a 60% drop in net profit preceded a fall on the gemstone company's share price.

Shares in Gemfields, the JSE-listed miner of coloured gemstones, crashed more than 13% on Thursday morning after it warned interim profits would more than halve amid a softer market for luxury goods and pressure on platinum group metal miners.

Gemfields, which is the owner of Fabergé, said net profit after tax for the six months ended in June is expected to fall about 61% to R334 million, partly reflects write down of $13.3 million to $18.7 million in relation of Sedibelo Resources, a platinum group metals company. As of 2022 the group held a 6.

Gemfields’ two key operating assets, the Kagem emerald mine in Zambia and the Montepuez Ruby Mine in Mozambique, meanwhile generated lower interim revenues of $64.6 million and $80.4 million respectively – down from $85.2 million and $95.6 million previously. Gemfields however said commercial-quality emerald and mixed-quality ruby auctions saw robust demand for coloured gemstones, alongside June’s higher-quality emerald auction setting a new record for any Kagem auction.

The group, valued at about R3.6 billion on the JSE, will present its interim results on 22 September. Its shares have fallen almost a quarter so far in 2023.In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month.

 

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