Gemfields warns of full-year loss

Gemstone miner Gemfields expects to report a net loss of $93.2-million, or R1.54-billion, for the year ended December 31, 2020, compared with a net profit of $39.1-million, or R565-million, reported for the 2019 financial year.

The company’s 2020 auction schedule was severely impacted by the many travel, quarantine and congregating restrictions put in place to mitigate Covid-19 contagion.

The pandemic has meant that no traditional Gemfields auctions have been held since February 2020, when $11.4-million was realised from the sale of commercial-quality emeralds in Lusaka, Zambia.

Gemfields subsequently conducted a series of sequential emerald mini-auctions during November and December, generating total revenues of $10.9-million.

In 2020 therefore, aggregate auction revenues were $22.3-million, a decrease of $178.2-million or about 89% when compared with the $200.5-million generated in 2019.

There was no ruby revenue in 2020, while Fabergé recorded revenues of $7.1-million, compared with the $10.5-million reported for2019.

An $11.5-million impairment charge has been recognised against Fabergé’s intangible asset for the year, driven by reduced revenue expectations arising from Covid-19 and general market conditions.

A review of Gemfields’ shareholding in Sedibelo Platinum Mines also resulted in a fair value write-down of $27.9-million to $29.6-million. 

Excluding the impairment charge against the Fabergé intangible asset and including the fair value loss against Sedibelo, Gemfields’ headline loss per share is expected to be $0.06, compared with headline earnings a share of $0.01 in 2019.

The company’s results for 2020 will be published on March 30