Precious-stones group Gemfields, the owner of Fabergé, has posted an interim net loss of almost two thirds its market capitalisation, after Covid-19 cancelled auctions and hit demand.

The group has only held one gemstone auction so far in 2020, while auctions originally scheduled for May, June and August have been cancelled.

The group reported a net loss of $56.7m (R959m) in its six months to end-June compared with a profit of $12.4m previously, with the group also writing down its jewellery business Fabergé by $11.5m. The group also wrote down its stake in unlisted Sedibelo Platinum Mines by $12.5m.

CEO Sean Gilbertson said the group was developing alternative gemstone selling mechanisms, and an online auction platform was nearing completion, but this approach would still require in-person viewings of the gemstones by clients.

“We entered the pandemic with a strong balance sheet and have implemented measures to progressively reduce costs to the extent that the pandemic protracts, with monthly operating expenditure dropping significantly during the second quarter,” Gilbertson said.

At the end of June the group had a net cash position of $9.3m  from $25.4m at the end of December.

The group is considering further measures to raise capital, for example additional debt, and a sale of its 6.5% stake in Sedibelo, which was worth $45m at the end of June.

In morning trade on Friday Gemfield’s share was unchanged at R1.30, giving the group a market capitalisation of R1.52bn. The group’s share has fallen 27.78% so far in 2020.


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