Gem Diamonds Profit Rises in Strong Market

RAPAPORT… Gem Diamonds’ revenue and earnings jumped last year as the sector bounced back from the Covid-19 downturn.

Sales rose 6.5% to $201.9 million, the owner of the Letšeng mine in Lesotho said Thursday. Net profit attributable to shareholders increased 9% to $14.8 million.

Prices have climbed steadily since the second half of 2020 as market sentiment improved and supply declined. They advanced further during the past year, the company explained.

“The continuing recovery of the diamond market in 2021 was evidenced by the robust prices achieved for Letšeng’s large, high-value diamonds, and there was also a significant improvement in the prices achieved for smaller diamonds,” said Gem Diamonds CEO Clifford Elphick.

The main driver of growth was higher volumes, as production returned to more normal levels after the 2020 lockdowns and market conditions improved, management added. Output jumped 14% to 115,335 carats, with sales volume up 11% at 109,697 carats. The average price slipped 4% to $1,835 per carat due to a drop in the number of large-stone recoveries, though rough values increased on a like-for-like basis.

Still, the company sold 21 rough stones for more than $1 million each, with the segment contributing revenue of $64.5 million.

Image: The Letšeng mine in Lesotho. (Gem Diamonds)