Gemfields reports 137% rise in H1 revenue

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Company sees revenue spike at US$65.7m in last six months of 2013.

By Sarah Louise Jordan

Gemfields has revealed a US$38 million (£22.7m) increase in revenue in the last six months of 2013 compared to 2012 in its latest H1 financial statement.

Revenue rose from US$27.7 million (£16.5m) in the last six months of 2012 to US$65.7 million (£39.3m) in the latter half of 2013, hailing positive growth for the precious gemstone company that boasts Mila Kunis as its celebrity ambassador.

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Ian Harebottle, chief executive of Gemfields, commented: “Gemfields has delivered a very strong first half with a 137% increase in revenues to US$65.7 million and a pleasing EBITDA figure for the period of US$18 million.”

EMERALDS

The company’s emerald production showed a significant decline with 10.4 million carats compared to 14.5 million in 2012, alongside a slight decline in grade of carats per tonne.

The company also reported an increase in unit production costs and cash rock handling unit costs, from US$0.57 (£0.34p) per carat to US$0.85 (£0.50p) per carat and US$1.12 (£0.67p) to US$1.32 (£0.72p) respectively.

At auction in February 2014, Gemfields saw its highest aggregate revenues to date with a record average price of US$59.31 (£35.50) per carat for higher quality rough emeralds. Trade of rough emeralds not obtained from its own mining operations also yielded US$8.5 million (£5m) in the latter half of 2013.

Additionally, an auction of lower quality rough emeralds and beryl stones in November 2013 set revenue records with US$16.4 million (£9.8m) and a 27% increase in unit price to US$3.32 (£1.98) per carat.

Gemfields Kagem emerald mine was also praised for its 2.8 million injury-free shifts by the Mines Safety Department of Zambia.

RUBIES

Approximately 5.1 million carats of ruby and corundum were mined from Gemfields’ Montepuez in Mozambique, compared to just 0.16 million carats in 2012 – highlighting a significant growth in this area. Also completed is a ‘first-of-its kind’ grading and sorting framework for rough rubies that Gemfields says promises to make changes in the industry.

FABERGÉ

Gemfields acquisition of Fabergé in November 2012 has proved successful for the company with 89% increase in year-on-year Christmas profits, alongside a 198% increase in year-on-year sales and sales orders revenue in January 2014.

Since the appointment of Robert Benvenuto as president in October 2013, the brand has unveiled a new advertising campaign entitled The Art of Colour to support Gemfields’ coloured gemstone strategy, and revealed the The Fabergé Big Egg Hunt – a collaboration with artists and designers to display 300 egg sculptures in New York in April 2014.

2014 OUTLOOK

With its first ruby auction and an additional emerald auction scheduled for the second half of the financial year (ending 30 June 2014), Gemfields is forecasting a busy year ahead.

Its over-arching strategy for handling and auctioning rubies is said to have proved a particular success, with the company putting plans in place to continue this in the second half of the financial year.

Harebottle added: “Gemfields’ next chapter as a leading producer, marketer and retailer of emeralds, rubies and other precious coloured gemstones is set to be accelerated in the short term and we look forward to building on our successes to date, underpinned by our broadening footprint, encouraging consumer demand and our exceptional team, to whom I am eternally grateful.”

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