London: Gemfields’ net profit nearly doubled to $23.5m (£18.2m) in the year ended 30 June 2016, up from $12.3m in 2015.
This came as the firm’s revenue rose 13 per cent to $193.1m during this period, up from $171.4m a year earlier.
Production at Gemfields’ flagship Kagem emerald mine in Zambia held steady at 30m carats, while output its ruby operation in Mozambique rose 22.6 per cent to 10.3m.
Gemfields, which counts actress Mila Kunis as a brand ambassador, confirmed today that it continues to defy a mining industry downturn with strong revenue and profit growth.
During the last year it mobilised a new drilling crew in Ethiopia, established trading centres in Sri Lanka and expanded the size of its footprint in Colombia.
The company also secured financing in the year to meet what it expects to be rising demand for gemstones. This will be used to boost production at its Kagem and Montepuez operations over the next three years.
Ian Harebottle, CEO of Gemfields, commented, “This financial year has seen Gemfields consolidate its position as an industry leader. The Company has achieved record operational progress which has translated into strong financial results for the Group, generating revenue of US$193.1 million, EBITDA of US$69.4 million and profit after tax of US$23.5 million. In addition, US$64.1 million was generated in operating cash flow, an increase of 97% on the previous due to a rise in operating profit. Over the past five years, Gemfields revenue has increased 380% and total revenue generated since the Company’s first auction in 2008 has reached US$717.6 million, an impressive achievement given the challenges faced by the mining and luxury goods industries.
Gemfields strategy is to grow production over time from two of its world class deposits, the Kagem emerald mine in Zambia and the Montepuez ruby operation in Mozambique, increasing consumer demand and achieving higher prices for its rough gemstones year on year. Operationally Gemfields succeeded in its ambition of producing 30 million carats of rough emerald and beryl from Kagem, as guided, and 10.3 million carats of rough ruby and corundum from Montepuez, exceeding guidance. Global imports of emeralds, rubies and sapphires also reached US$5.9 billion in 2015, up from US$5.2 billion in 2014, demonstrating a 13% increase in consumer demand on the previous year.
The Company continues to see opportunities in new and existing markets for further price escalation. For the coming financial year Gemfields is targeting four emerald and beryl, two high and two commercial quality, auctions and two mixed quality ruby and corundum auctions. In addition, to meet the rising demand for coloured gemstones, the Company secured financing in the year to realise its expansion programme which will see higher production at both the Kagem and Montepuez operations over the next three years
Lastly I would like to thank the entire Gemfields team who continue to work tirelessly in the Company’s mission to be the world’s foremost gemstone supplier, actively leading the growth and development of the industry and promoting trust and transparency throughout the supply chain.”
