LONDON (ShareCast) - (ShareCast News) - Gem Diamonds posted a 27.58% drop in first half profits and said it would focus on cost control for the rest of the year.
The diamond producer's revenue fell by more than 20% to £118m from $148.9m, which Gem said was due to a cautious approach from diamond traders which caused a decrease in demand rough and polished diamonds.

The cost of sales for the six month period was trimmed by 15% to $56.1m from $66m, which included waste stripping costs amortised of $24.4m.

The company which owns 70% of the Letšeng mine in Lesotho and 100% of the Ghaghoo mine in Botswana, said the latter was progressing slower than planned.

Gem, which in June paid a maiden dividend of 5c per share, amounting to $6.9m, said its "ultimate focus" for the second half of the year would be on cost control and operational efficiencies so that it could pay its planned 2016 dividend.

"In the current depressed diamond market and due to the slower than expected ramp up at Ghaghoo, capital and cash management discipline will be of high priority in the short-term."

FinnCap, which held a 'buy' recommendation and price target of 279p said the results were broadly in line with its expectations.

"In particular, diamond sales and prices held up well during the period, in contrast to the results from some of the mass-market diamond producers," FinnCap said.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE