Gemfields gives an outstanding performance in past financial year

According to Ian Harebottle, CEO of Gemfields, the company has posted a very encouraging and optimistic feat at the end of year closing 30, June 2011. He stated, “The past financial year has been an outstanding one for Gemfields. We have doubled revenues, improved our profit eight fold and, following our record rough emerald auction in July, we have started the new financial year strongly. Production is up, costs are well contained and increasing demand from both the trade and consumer markets alike confirms the success of our various marketing and promotional efforts. We look forward to the prospect of continued growth and expansion throughout the coming year.”

The period delivered a record annual production of 33 million carats (2010: 17.4 million carats) indicating a 90 percent increase. Grade for the year to 30 June 2011 was 478 carats per tonne (2010: 286 carats per tonne). Profit after tax was up 729 percent y-o-y to US$21,445,643 (2010: US$2,582,868); revenue from emerald and beryl sales more than doubled to US$40,157,218 (2010: US$19,906,203). The company attributes the growth to mainly be inspired by its on-going ability to contain costs whilst increasing its levels of production. In 2009, given the backdrop of the uncertain global economy and its associated impact on the luxury goods sector, prompted an indepth strategic review of Gemfields’ group wide operations. As a result, Gemfields remains committed to reducing operating costs, improving operating efficiencies and delivering a consistent supply of well-graded, high-quality rough emeralds to selected stakeholders, which has delivered well for the company in the year gone by.

Average monthly operating costs at the Kagem mine were contained at US$1.07 million (2010:US$1.06 million). The company’s cash at bank stood at US$13,648,654 and cost of emerald inventory at hand was US$18,680,755 (2010: US$16,545,106).

Further, the company noted healthy appetite for high quality ethically sourced gemstones, at its various auctions through the year where companies in all market sectors showed interest in participation. This trend was further demonstrated in the auction held in July 2011 in which the Group achieved record sales totalling US$31.6 million. And though there is a looming potential downturn in the global economy, the positive interest shown at the auctions has kept Gemfields to capitalize on its current position of strength to drive additional growth within the Group, albeit with a cautious approach.

The company also launched notable marketing and promotional initiatives during the year including the World Land Trust’s “Emeralds for Elephants” campaign, the “Emerald – Uniquely you” marketing campaign and the Indian International Jewellery Show’s (IIJS) “Jewellery Designer of the Year” awards.

Given the Group’s improving market position and financial condition, the decision has been taken to reinitiate a number of geological and exploration projects. Securing the Group’s assets, protecting its people and limiting the theft of gemstones remain key operational priorities for the company.