Meanwhile nonexecutive chairman Roger Davis says he will resign after 10 years in the position, and no replacement has been named yet..................
Gem Diamonds took a $170m impairment against
its mothballed Ghaghoo mine in Botswana, pushing the company into a deep attributable loss for the year exacerbated by the recovery of fewer diamonds larger than 100 carats at its key Lesotho mine.
Gem, which is listed in London, reported an attributable loss of $159m for the year to end-December compared to a profit of $52m the year before. Before the exceptional item charge of $176m, which included the closure of a South African business, attributable profit was $18m, down from $42m a year earlier.
Gem withheld its dividend payment, pointing to the erosion of its cash balance and its desire to strengthen its balance sheet this year from proceeds from its Letseng mine in Lesotho, which the company says is the highest dollar per carat kimberlite mine in the world.
its mothballed Ghaghoo mine in Botswana, pushing the company into a deep attributable loss for the year exacerbated by the recovery of fewer diamonds larger than 100 carats at its key Lesotho mine.
Gem, which is listed in London, reported an attributable loss of $159m for the year to end-December compared to a profit of $52m the year before. Before the exceptional item charge of $176m, which included the closure of a South African business, attributable profit was $18m, down from $42m a year earlier.
Gem withheld its dividend payment, pointing to the erosion of its cash balance and its desire to strengthen its balance sheet this year from proceeds from its Letseng mine in Lesotho, which the company says is the highest dollar per carat kimberlite mine in the world.
Gem’s nonexecutive chairman Roger Davis said he would resign after 10 years in the position. No replacement was named.
While the Letseng mine met its weather-affected targets for the year, producing 108,206 carats, which was similar to the previous year’s 108,579 carats, the recovery of diamonds larger than 100 carats fell to five from the previous year’s 11.
"The lower revenue achieved for the year is a direct consequence of this," said Gem CEO Clifford Elphick, who said there had been a similar occurrence in 2012 and the company was confident the mine would continue to deliver diamonds larger than 100 carats.
Revenue for the year fell by 24% to $189.8m.
Ghaghoo, which produces smaller, commercial diamonds, was put on care and maintenance in February this year because of the weak prices for the diamonds it produced. Gem recognised a $171m impairment against the mine and said it would restart it once it felt the market for its diamonds had recovered.
While the Letseng mine met its weather-affected targets for the year, producing 108,206 carats, which was similar to the previous year’s 108,579 carats, the recovery of diamonds larger than 100 carats fell to five from the previous year’s 11.
"The lower revenue achieved for the year is a direct consequence of this," said Gem CEO Clifford Elphick, who said there had been a similar occurrence in 2012 and the company was confident the mine would continue to deliver diamonds larger than 100 carats.
Revenue for the year fell by 24% to $189.8m.
Ghaghoo, which produces smaller, commercial diamonds, was put on care and maintenance in February this year because of the weak prices for the diamonds it produced. Gem recognised a $171m impairment against the mine and said it would restart it once it felt the market for its diamonds had recovered.
However, the company noted this was unlikely to be any
time soon. Elphick said not only had the prices for Ghaghoo’s diamonds
fallen to $142 per carat from $210 per carat, but that weakness in the
market for those types of diamonds was "further exacerbated by the
increase in supply from three new mines entering this particular
category of diamond market in February 2017".
Gem repaid a $25m loan within Ghaghoo by accessing a revolving credit facility.
Gem shut its Calibrated Diamonds Investment Holdings business in SA, accounting for $2m of the total impairment. The Calibrated business used laser diamond shaping and cutting technology and machinery as part of the integration of the Gem’s rough diamond analysis and manufacturing business. It also scaled back its Baobab operation in Antwerp, opting to outsource cutting and polishing services.
Gem ended the year with $31m in cash down from $86m a year earlier. Current loans and borrowings shot up to $28m from $5m.
"As a group, our focus will be on replenishing cash and strengthening our balance sheet. The emphasis for 2017 and beyond remains on maximising our core asset, Letseng," Elphick said.
@BDLIVE
Gem repaid a $25m loan within Ghaghoo by accessing a revolving credit facility.
Gem shut its Calibrated Diamonds Investment Holdings business in SA, accounting for $2m of the total impairment. The Calibrated business used laser diamond shaping and cutting technology and machinery as part of the integration of the Gem’s rough diamond analysis and manufacturing business. It also scaled back its Baobab operation in Antwerp, opting to outsource cutting and polishing services.
Gem ended the year with $31m in cash down from $86m a year earlier. Current loans and borrowings shot up to $28m from $5m.
"As a group, our focus will be on replenishing cash and strengthening our balance sheet. The emphasis for 2017 and beyond remains on maximising our core asset, Letseng," Elphick said.
No comments:
Post a Comment