Gemfields expects impairments to lead to full-year loss
Newly implemented export duties on Zambian gemstones cause a $22.6m impairment of precious-stone producer’s Kagem mine
Precious-stone producer Gemfields warned on Friday that it expected to swing into a full-year loss for the year to end-December, hit by impairments of some of its largest assets.
The company expects a loss per share of US5c during the period, from earnings per share of 4c previously.
Net loss after tax was expected to be $60.4m, from a profit of R45.1m in the period, the company said in a statement.
Due to newly implemented 15% export duties on emeralds and beryl in Zambia, an impairment charge of $22.6m was recognised against Gemfield’s Kagem mine.
The company also sold about 60% of its shares in Jupiter, part of that company’s relisting on the Australian Securities Exchange. Although Gemfields realised profits of $11.7m from this sale, a decline in Jupiter’s share price resulted in a $11.9m value loss for the company’s remaining shares.
A review of the company’s holdings in Sedibelo Platinum also resulted in a fair value loss of $47.6m.
Gemfields — previously called Pallinghurst Resources — owns emerald and ruby mines along with jewellery brand Fabergé.