Gemfields: losses due to disrupted market for emeralds and lower rubies production
LONDON: Gemfields the publication of the Company’s audited Annual Report and Accounts for the year ending 31 December 2024. Total annual revenue of USD 213 million is down from USD 262 million, due to disrupted market for emeralds in H2 2024 and lower production of premium rubies at MRM impacting achievable auction revenues.
Construction of second processing plant in Mozambique is materially on track and on budget with completion expected by end of H1 2025.
Mining at Kagem continues to be paused, with emeralds only produced by processing the pre-mined stockpile. Reasonable emerald production achieved but with a lower rate of premium emeralds to date.
Operating costs are down to USD 172 million (2023: USD 179 million). Significantly lower operating costs are expected in 2025.
EBITDA margin of 19.2% (2023: 31.7%) is due to lower revenues at MRM and Kagem. Significant impairment charges in year, primarily at Kagem (due to weaker emerald market and pause of mining), MML and Nairoto (both due to halt of operations). Adjusted headline loss per share of USD cents 1.8 for the year as a result (2023: Adjusted headline earnings per share of USD cents 1.5).
Sean Gilbertson, CEO of Gemfields, commented: “2024 witnessed our 50th Zambian emerald auction, the 10-year anniversary of our first ever Mozambican ruby auction and a new chapter of capital projects in Gemfields’ growth trajectory as a world-leading responsible miner of coloured gemstones.
Market conditions through 2024 were more challenging than we could have anticipated. Revenues at both emerald and ruby auctions were materially lower than the Group experienced in recent years due to three principal factors:
a) disturbed emerald market dynamics arising from the oversupply of Zambian emeralds at discounted prices by a competing Zambian emerald producer during the second half of 2024, compounded by conflicting auction dates and so giving rise to a poor Zambian emerald market outlook for the first half of 2025;
b) lower-than-expected production of premium rubies at MRM; and
c) a weaker luxury and gemstone market generally, given economic difficulties in China and widespread geopolitical turbulence.
Furthermore, the Group faced significant operational challenges in relation to civil unrest and associated supply chain interruptions in Mozambique as a result of the contested general election in October 2024.
