Gem Diamonds cites challenging diamond market as profits fall

UK-based diamond production firm Gem Diamonds has been affected by the challenging diamond market as profits fell in the first half of the year.

In its first-half financial report for the six months ending June 30, 2015, Gem Diamonds reported that its pre-tax profits fell from $56.2m (£35.7m) in the first half of 2014 to $40m (£25.4m) during the first six months of 2015.

Revenue fell 14% from $149m (£94.8m) to $118m (£75.1m), while spot prices for diamonds under 0.5 carats were down 25% since March last year, and prices for 3-carat diamonds remained flat.

Despite this, operations at its 70% owned Letšeng mine – which is known for its high-quality diamonds and has highest proportion of large, high-value diamonds, making it the highest average dollar per carat kimberlite diamond mine in the world – continued to perform well.

Clifford Elphick, chief executive, said: “Letšeng continues to consistently produce the large, exceptional quality diamonds. Prices for these goods have remained firm, despite the current challenging conditions in the diamond market.”