Gemfields Group Ltd warned on Friday it expects to swing to an annual loss after a platinum group metals write-down and the withdrawal of emerald auction.

The London-headquartered gemstones producer expects a loss per share of 0.8 US cents in 2023, swung from earnings per share of 4.8 cents in 2022.

Headline loss per share, which includes Sedibelo Resources Ltd’s fair value loss, is likely to be 0.9 cents compared with the prior year’s headline EPS of 4.8 cents.

Gemfields said a review of its 6.5% shareholding in Sedibelo, the South African platinum group metals mining company, has resulted in a fair value write-down of between $4.0 million and $28.0 million.

Gemfields said revenue at its 75%-owned Kagem emerald mine in Zambia plunged 40% to $89.9 million in 2023 from $148.6 million in 2022, and top-line at 75%-held Montepuez Ruby Mining Ltda in Mozambique fell 9.2% to $151.4 million from $166.7 million. These are its two key operating assets.

Its luxury brand Faberge, meanwhile, recorded revenue of $15.7 million, down 11% from $17.6 million due to a softer luxury market.

Gemfields said it expects post-tax net loss of $2.8 million, swung from profit of $74.3 million.

‘The loss is driven primarily by the Sedibelo unrealised non-cash write-down and the withdrawn higher-quality emerald auction, the production of which will be offered for sale in 2024, and is not a reflection on the overall strength of the Gemfields business,’ it said.

‘Production of premium rough gemstones has been weaker at both Kagem and Montepuez Ruby Mining compared to 2022, and resulted in November 2023’s planned higher-quality emerald auction being withdrawn from our schedule,’ Gemfields Chief Executive Officer Sean Gilbertson added.

Gemfields expects its annual financial results on Monday.

In London, Gemfields shares were down 5.2% at 12.56 pence on Friday morning. However, they rose 0.7% in Johannesburg to R 3.12.

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