Gem Diamonds H1 profit falls after Covid disrupts operations

In the six months to the end of June, pre-tax profit fell to $2.5m from $18.7m in the first half of last year, with revenue down to $69.5m from $91.3m. Underlying earnings before interest, tax, depreciation and amortisation came in at $11.3m, down from $25.3m in the same period a year ago.

Gem said it incurred Covid-19 standing costs of $3.3m after its operation were suspended for a month due to the pandemic.

Chief executive officer Clifford Elphick said: "Letseng delivered satisfactory operational results notwithstanding the imposed shutdown of 30 days during the period to curb the spread of Covid-19. The frequency of large diamonds recovered improved in all size categories greater than 10.8 carats when compared to the previous period.

"Despite the challenging global conditions, the sales results during the period demonstrated the continued demand for Letseng's high quality diamonds, achieving an average price of $1 707 per carat. It is also pleasing to note the reopening of key sectors within the diamond industry, in particular the manufacturing sector, which should support positive demand in the short to medium term."