Gemfields Group (GML) H1 2025 earnings summary

Executive summary

• H1 2025 was challenging due to lower premium ruby and emerald output, Kagem's mining suspension, civil unrest in Mozambique, and a new 15% Zambian export duty, all impacting cash flow and operations.

• Rights issue and Fabergé divestment post-period strengthened the balance sheet and sharpened focus on core African gemstone mining.

• MRM's second processing plant (PP2) became operational in September, expected to triple ruby processing capacity and drive new revenue in late H2 2025.

• Cost-cutting and streamlining measures, including a temporary halt to Kagem mining, lowered operating costs by 30% year-over-year.

• Loss after tax was $24.6m, compared to a $13.7m profit in H1 2024, driven by reduced sales and a $4.6m loss from discontinued operations (Fabergé).

Financial highlights

• Group revenue for H1 2025 was $64.2m, down 47% year-over-year; Kagem contributed $21.1m, MRM $39m.

• EBITDA loss of $4.9m and adjusted EPS loss of 1.5 cents per share.

• Free cash flow was negative $22.1m, mainly due to reduced revenues and ongoing CapEx at MRM.

• Net debt at June 30 was $45.1m (including auction receivables), improved since December due to the rights issue.

• Capital expenditure was $28.2m, mainly for MRM's PP2.

Outlook and guidance

• Kagem's premium emerald production has recovered post-suspension, with strong auction results post-June 2025.

• MRM's PP2 ramp-up in Q4 2025 is expected to triple processing capacity and support future growth.

• Three further auctions planned for H2 2025, including ruby and emerald sales.

• Capital allocation will prioritize balance sheet strengthening and debt reduction over dividends or M&A in 2026.

• Management remains cautiously optimistic for H2 2025, citing improved auction demand and pricing trends.