Gemfields books net profit in 2019
In accordance with the JSE, Gemfields is reasonably certain that its net profit after tax will be USD 39.1 million for the year ended 31 December 2019 compared to a net loss after tax of USD 60.4 million for the year ended 31 December 2018. In ZAR terms, the net profit after tax is expected to be ZAR 565 million.
Gemfields’ two key operating assets, MRM and Kagem, generated revenues of USD 121.5 million (USD 127.1 million for the comparative period) and USD 79.0 million (USD 60.3 million for the comparative period) respectively during the year to 31 December 2019 and Fabergé recorded revenues of USD 10.5 million (USD 13.4 million for the comparative period).
Given the recent suspension of the 15% export duty payable in Zambia throughout 2019, an impairment reversal of USD 21.6 million has been recognised against our Kagem asset. During the period, the Company entered into an agreement to sell its entire stake in Jupiter Mines Ltd (Jupiter) with the sale being structured in two phases.
The first phase completed in June 2019 and the second phase completed in November 2019 with the Group receiving a total of USD 30.4 million in sale proceeds across both phases. The Company additionally received a dividend from Jupiter of USD 2.6 million and recorded mark-to-market gains of USD 4.6 million from its Jupiter holding during the period due to a rise in the Jupiter share price from the beginning of the period. A review of our shareholding in Sedibelo Platinum Mines Ltd (Sedibelo) has resulted in a fair value gain of USD 7.1 million.
The Company’s weighted average shares in issue during the year ended 31 December 2019 was 1,264,903,398 (1,316,580,827 for the year ended 31 December 2018). The financial information upon which this trading statement is based has not been reviewed or reported on by Gemfields’ auditors. The Company’s audited financial results for the year ended 31 December 2019 are expected to be released on SENS and RNS on or around 27 March 2020.
