Gem Diamonds Ltd. (LSE : GEMD), owners of the Letseng Diamond Mine in Lesotho and the Ghaghoo Mine in Botswana, announcing its full year results for the year ending 31st December, 2020, on 11th March, 2021, said the Company realised a total revenue of US$ 189.6 million as opposed to US$ 182.0 million for the year 2019, representing an increase in sales of 4.2%.
According to the Financial Results, earnings before interest, taxes, depreciation, and amortization (EBITDA) from continuing operations was US$ 53.2 million, and net profit was US$ 27.5 million, an increase of US$ 12.5 million from that of 2019, which was US$ 15.0 million. Attributable profit also rose from US$ 7.1 million in 2019 to US$ 16.9 million in 2021, working out to earnings per share of 12.1 US Cents. Accordingly, the Directors of the Company have proposed the payment of dividends of 2.5 US Cents per share, subject to approval by shareholders at the 2021 AGM.
The operational results for the year 2020 was also quite impressive in comparison to year 2019. Out of 5.4 million tons of ore treated, a total of 100,780 carats were recovered, achieving an average value of US$ 1,908 per carat. Apart from this 16 diamonds larger than 100 carats in weighi were recovered during the year and the highest dollar per carat achived for a white rough diamond was US$ 38,827.
Gem Diiamonds Ltd. has laid particular emphasis in safeguarding the health of its employees, contractors and surrounding communities, eversince the onset of the devastating COVID-19 pandemic. In this regard, in keeping with WHO guidelines, the Company had put in place measures such as Thermal Screening, X-ray Screening, Rapid Antibody and Antigen Diagnostiic Screening and Polymerase Chain Reaction (PCR) testing, promotion of sanitation measures, appropriate social distancing, compulsory wearing of face masks and provision of Personal Protection Equipment. As part of the COVID-19 management strategy, all suspected cases are safely transferred to their respective residences or national health facilities, if determined medically necessary for quarantining, thus limiting suspected positive cases on mine site.
Commenting on the full year results for the year 2020, CEO of Gem Diamonds Ltd. Clifford Elphick said,
“Gem Diamonds has delivered positive operational and financial results during a very challenging year. Our first priority remains the safety of our employees, contractors and surrounding communities and we have taken steps to support the Lesotho Government in securing COVID-19 vaccinations for our workforce and surrounding communities.
The operational results were characterised by strong cash flows, the achievement of all revised operational metrics and the recovery of 16 diamonds greater than 100 carats each, the highest number recovered in a single year. The stronger prices achieved in the second half of 2020, reaffirms the recovery of the diamond market and the unique quality of the Letšeng production.
The Group has proven its ability to respond to an unprecedented global crisis in an agile and effective manner. This, together with the cost containment and cash preservation initiatives implemented, positions the Company well for the ongoing recovery of the diamond market in the coming years.
We are pleased to announce that based on the results achieved in 2020, the Board has recommended the payment of an ordinary dividend of 2.5 US cents per share.”
