Gemfields flags wider loss on impairments and lower ruby recoveries

Gemfields Group Ltd on Friday said it expects to report a wider loss for the first half, reflecting an impairment charge and a "more conservative approach to forecasting grade recoveries".

The London-based miner and marketer of coloured gemstones flagged "challenging" conditions in a trading update for the first half, thanks to lower-than-expected recoveries of rubies.

Previously, Gemfields had noted security-related disruption, illegal mining activity, and delayed VAT receipts as issues in Mozambique, where its Montepuez ruby mine is located.

Still, the company said it was looking to implement improvement measures where possible, and that it was "encouraged" by the results.

Gemfields shares fell 12% to 65 rand cents on Friday morning in Johannesburg, though London-listed shares were flat at 3.50 pence each.

First-half auction revenue for its two key assets, Montepuez in Mozambique, and Kagem emerald mine in Zambia, is estimated at USD76.1 million, up from USD38.9 million, and USD26.7 million, up from USD21.1 million, respectively.

Gemfields estimated that auction revenue for the first half totalled USD102.8 million, a sharp increase from USD64.2 million a year before, though this reflects disruptions in the auction schedule, it said, leading some revenue to be deferred to 2026.

Gemfields is eyeing a net loss of USD73.5 million for the first half, widened from USD20.5 million a year prior, mainly due to non-cash impairment charges related to Montepuez, the company said, with the impairment now reflecting a "more conservative approach to forecasting grade recoveries".

In rand terms, net loss is anticipated to be ZAR1.21 billion, widened from ZAR363.2 million.

Loss per share is forecast to be 4.3 US cents, widened from 1.7 US cents on-year, or 70.55 rand cents, widened from 30.12 rand cents.

Headline earnings per share is forecast at 0.6 US cent, swinging from a loss of 1.5 US cents the year prior. In rand terms, headline EPS is expected to be 9.84 rand cents, swinging from a loss of 26.60 rand cents on-year.

"Our priority for the remainder of 2026 is to demonstrate that the recent improvements at [Montepuez] can be sustained,while maintaining financial discipline and flexibility across the group," commented Chief Executive David Lovett.

Lovett took over as interim CEO in July, alongside his existing role as chief financial officer, after Sean Gilbertson stepped down.

Gemfields is due to release its full interim results on September 30.

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