Gemfields profit falls on lower emerald sales

Emerald miner Gemfields Plc said first-half core earnings fell 39 percent as it held just one auction during the period compared with two in the prior year, but production climbed by two-thirds.

Demand for precious stones and jewellery has been volatile, hit by the euro zone crisis and a slowdown in growth in key markets like India and China.

Gemfields said gemstone production rose about 65 percent to 14.5 million carats in the first half, mainly on higher grades recovered at its Kagem mine in Zambia.

"Significant interest from downstream stakeholders in attending the Gemfields' auctions provides sound evidence of ongoing healthy demand," the company said.

Gemfields is scheduled to have two auctions for its second half ending June 30.

The company, which named actress Mila Kunis its brand ambassador earlier this month, mainly mines emeralds at the Kagem mine, but also has interests in ruby and sapphire deposits.

Earnings before interest, tax, depreciation and amortisation fell to $19.5 million for the six months to December 31, from $32.2 million a year earlier.

Revenue from rough and finished emerald sales decreased 39 percent to $27.7 million.

In November, Gemfields agreed to buy luxury jeweller Faberge, the maker of lavish Easter eggs for Russia's last tsar, in a deal valued at $142 million.

The miner's shares, which have fallen about 12 percent since the company announced the Faberge deal, closed at 30.875 pence on the London Stock Exchange on Friday.