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Gemfields cuts dividend as profits dive on emerald auction withdrawal

Gemfields Group (LSE: GEM) slashed its dividend on Monday after reporting an 86% plunge in pretax profit to $16.6 million for 2023 driven by a write-down on its platinum group metals investment and the withdrawal …

Gemfields Group (LSE: GEM) slashed its dividend on Monday after reporting an 86% plunge in pretax profit to $16.6 million for 2023 driven by a write-down on its platinum group metals investment and the withdrawal of an emerald auction.

The gemstone miner’s revenue tumbled 23% to $262 million as premium gemstone production waned at both its 75%-owned Kagem emerald mine in Zambia and Montepuez Ruby Mining in Mozambique. Kagem’s revenue plummeted 40% to $89.9 million, while Montepuez saw a 9.2% drop to $151.4 million.

Gemfields booked $28 million in unrealized fair value losses on its 6.5% stake in Sedibelo Resources, a platinum group metals producer, sharply higher than the $5.2 million loss a year ago.

The company cut its final dividend to 0.857 US cents from 4.125 cents, drawing from income reserves. Loss per share was 0.8 US cents versus earnings of 4.8 cents in 2022.

Chief Executive Sean Gilbertson cited “considerable investment” for future growth, including a second Montepuez processing plant. A recent emerald auction raised $17.1 million, down 19% year-over-year.

Gemfields shares fell 1% in London morning trading.


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