Gem Diamonds lifts output guidance as H1 profits more than double

Underlying profits at Gem Diamonds more than doubled in the first half as increases in production, as well as the number of larger gemstones recovered, was able to offset a dip in the average price per carat.

Underlying EBITDA totalled $19.1m for the six months to 30 June, up from $8.4m in the same period of 2023.

The company, which operates the Letšeng mine in Lesotho – one of the largest open pit diamond mines in the world – said improvements in operational outputs mean full-year guidance on output and sales have both been upgraded.

Total carats recovered is now expected to 98,000 to 101,000 carats in 2024, though down from 109,656 carats last year, while carats sold guidance has been revised to 100,000 to 103,000 carats, down from 104,520 carats previously.

Revenues totalled $78m in the first half, up from $71.8m a year earlier, despite the average value achieved falling to $1,366 per carat from $1,373 previously.

The company recovered a total of 55,873 carats during the period, up from 50,601 carats previously.

"Focused cost and operational efficiency initiatives undertaken at Letšeng since H2 2023, have resulted in enhanced plant stability, increased overall plant utilisation, increased carats recovered and an improvement in large diamond recoveries," Gem said.

Meanwhile, eight diamonds greater than 100 carats were recovered during the period, compared with just two a year before, with two more found since the end of the first half.

Looking forward, Gem said the global diamond market remains under "significant pressure" due to a challenging macro environment. The company noted that Russian diamonds are reported to be entering the market despite imposed sanctions, adding to the overall rough diamond supply, while the manufacturing of lab-grown diamonds continues to increase.