Gemfields Reports $93M Loss in 2020 Amid Coronavirus Pandemic

SourcingMar 31, 2021

Gemfields Reports $93M Loss in 2020 Amid Coronavirus Pandemic

The colored stone miner wasn’t able to hold any regular auctions during the year.

Gemfields was not able to hold any regular gemstone auctions in 2020 due to the pandemic, severely impacting its bottom line in its full-year financial results.
London—The coronavirus pandemic led to the suspension of Gemfields’ mining operations and its regular auction system, severely impacting its bottom line in 2020.

The company just released its full-year financial results, reporting a drop in revenue and slipping into the red amid a challenging year.

For the year ended Dec. 31, revenue was down 84 percent, plummeting from $216.2 million in 2019 to $34.6 million in 2020. And whereas the company earned a net profit of $39.1 million in 2019, it reported a net loss of $93.2 million for 2020.

The lockdowns during the pandemic meant mines had to shut down.

Gemfields suspended activities at its Kagem emerald mine in Zambia on March 30, 2020 and its Montepuez ruby operations in Mozambique on April 22, 2020.

Restrictions on travel and the movement of goods also meant the miner’s clients weren’t selling inventory at trade events and had no need to purchase more.

Gemfields didn’t hold any “traditional” auctions after its February 2020 sale of commercial-quality emeralds, which saw revenues total $11.5 million. 

In November and December, however, the company held a series of “mini auctions” to test the market. 

There were five small emerald auctions in which clients in Jaipur, Singapore and Tel Aviv were allowed private, in-person viewings of mixed-quality lots. 

Each event took place over five days, with bids accepted via Gemfields’ new online auction platform or by email, marking the first time customers have been able to bid for its Zambian rough emeralds online. 

Forty-six companies placed bids, and Gemfields said it achieved revenues of $10.9 million total and a per-carat average of $59.84, noting it found that rough emerald prices and demand have “held up well.”

“Winning bids were in line with and, in some cases, higher than, pre-COVID prices, and the number of bids per schedule increased, which demonstrates good demand,” the company said. 

No ruby auctions took place last year, but Gemfields did start a series of small auctions for rubies in March and expects them to be completed in early April. 

The company said it will continue with this auction model “in the near term” for both its emeralds and its rubies but hopes to return to a more regular auction format in the fourth quarter of this year. 

Meanwhile, operations at both Kagem and Montepuez have resumed, with the latter’s wash plant and sort house starting in mid-February 2021 and those at Kagem beginning mid-March. 

Gemfields said it anticipates operations to reach full capacity by the end of April. 

Brecken Branstratoris the senior editor, gemstones at National Jeweler, covering sourcing, pricing and other developments in the colored stone sector.

The Latest

CrimeApr 13, 2021
2 Men Plead Guilty in Murder of Texas Jeweler

The men, one of whom is the late Theodore Shaughnessy’s son, both received 35-year prison sentences.

FinancialsApr 13, 2021
Signet Ups Fiscal Guidance Following Strong Q1

The jewelry giant posted stronger-than-expected conversion rates and higher average ticket values in the first quarter.

IndependentsApr 13, 2021
Trend Forecaster Paola De Luca to Offer Virtual Courses

They will cover jewelry marketing and product and design trends, and the first session is free.

Brought to you by
4 Reasons You Need This Program for Mother’s Day

Learn how to increase customer loyalty and revenue by making JM™ Care Plan a cornerstone of your business plan.

EditorsApr 12, 2021
Looking Back on the Legacy of Alex Woo

Editor-in-Chief Michelle Graff shares memories of the designer, who died of cancer late last month at 47.

Weekly QuizApr 08, 2021
This Week's Quiz
Test your knowledge of jewelry news from the week of April 5-9, 2021.
Take the Quiz
TrendsApr 12, 2021
Amanda’s Style File: April Reigns With Diamonds

Here are 16 diamond jewelry classics for those lucky April babies.

WatchesApr 12, 2021
Watches International Relaunches With New Editor-in-Chief

Journalist and watch aficionado Stephen Watson will lead the timepiece publication’s coverage.

Brought to you by
Evaluating Your Inventory For Success in 2021 

After months of pandemic-driven social distancing, restrictions and lock-downs, consumers will be excited to visit your store. Now is the time to ensure you have the right inventory on-hand to capitalize on that excitement!

GradingApr 12, 2021
AGA Explores Gemology Career Paths With New Forum Series

The inaugural event is tomorrow and will feature four professionals who will talk about their careers and how they got there.