London, UK — Gem Diamonds (LSE: GEMD), a prominent player in the high-value diamond sector, disclosed a significant decline in its financial performance for the first half of 2023. The company’s revenue for H1 2023 experienced a substantial contraction of 28%, settling at $71.8 million compared to the $100 million recorded in H1 2022. This drop was coupled with an average diamond price of $1,373 per carat during H1 2023, a notable decline from the $1,745 per carat achieved during the same period last year. The total carats sold stood at 52,163, down from 57,075 carats in H1 2022.
The firm’s underlying EBITDA for H1 2023 was reported at $8.4 million, indicating a stark decline from the $20.9 million recorded in H1 2022. A significant shift in the financial landscape was also observed as Gem Diamonds reported a loss attributable to shareholders amounting to $1.0 million for H1 2023, in stark contrast to the $3.8 million profit achieved in H1 2022. This translated to a loss per share of 0.7 cents, diverging from the 2.7 cents per share profit reported during the same period last year.
In response to these results, the company highlighted the broader context of the global rough diamond market, noting a downturn throughout 2023. Gem Diamonds pointed to a decrease in the recovery of large, high-value diamonds, coupled with market pressures, as the primary factors contributing to the decline in the average dollar per carat and overall revenue during the period.
CEO Clifford Elphick acknowledged the challenging market conditions and their impact on the company’s financial performance. He noted, “The downturn in the rough diamond market together with increased grid electricity interruptions which increased operating costs, negatively impacted our financial results.”
Elphick emphasized the company’s dedication to addressing these challenges by prioritizing efforts to enhance the recovery of large diamonds through plant stabilization. He also indicated that a thorough review of operational and capital expenditures would be undertaken to ensure a sustainable path forward.
Gem Diamonds, recognized as a prominent global diamond producer of high-value stones, holds a 70% stake in the Letšeng mine located in Lesotho. Concurrently, the company is navigating the process of divesting its 100% ownership interest in the Ghaghoo mine situated in Botswana.
