RAPAPORT… Gemfields expects to suffer a loss of $56.7 million for the first half of the year amid the cancellation of most of its emerald and ruby auctions.
The loss for the six months ending June 30 compares with a profit of $12.4 million for the same period a year ago, the miner said Monday. The company was able to hold only one auction, in February, before being forced to cancel those scheduled for May, June and August due to the coronavirus pandemic.
“Gemfields’ 2020 auction schedule has been severely impacted by the many travel, quarantine and congregating restrictions put in place to mitigate the Covid-19 contagion,” it noted.
The miner also incurred an impairment charge — a devaluation of its assets — of $11.5 million on its Fabergé brand, driven by lower-than-expected revenues as a result of Covid-19, and the general downturn in the market. Gemfields is not sure when it will be able to resume normal operations.
“[We] remain unable to provide reliable guidance as to when [we] might next be able to host gemstone auctions or generate meaningful revenue from gemstone sales,” it added.
Gemfields operates the Kagem emerald mine in Zambia and the Montepuez ruby mine in Mozambique.
Image: Rubies from the Montepuez mine. (Gemfields)
Gemfields Warns of $57M Loss
The Bottom Line
- Gemfields expects a $56.7 million loss for the first half of 2020, reversing a $12.4 million profit from the previous year.
- The company canceled most emerald and ruby auctions after February due to Covid-19 restrictions, severely disrupting sales.
- An $11.5 million impairment charge on the Fabergé brand reflects lower revenues and market downturn amid the pandemic.
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