Gem Diamonds Limited

For H1 2026, revenue increased 32% to $59.7 million from $45.4 million, helped by sales of 42,624 carats at an average of $1,395 per carat versus $1,008 per carat in H1 2025. EBITDA was $8.6 million, compared with negative $2.6 million in the prior period, and attributable profit was $0.6 million versus a loss of $11.7 million; group EPS was USD 0.05 versus a loss of USD 0.084. Cost of sales was $47.9 million, though cash cost of sales declined to $31.3 million and direct cash cost per tonne treated fell to LSL 197, or $12, a 15% local-currency decrease; royalty and selling costs fell 86% to $700,000 and corporate costs fell 19% to $2.5 million. Cash increased to $20.2 million from $3.8 million at year-end, borrowings declined to $20.6 million from $24.9 million, and net debt fell to $0.5 million from $20.1 million. For the full year, management kept production and cost guidance unchanged, said it expects to maintain ore treatment throughput at approximately 5 million tonnes per annum, and noted that refinancing of roughly $75 million to $76 million of revolving credit facilities due in December 2026 is underway.

Clifford Elphick said the diamond market appears to be resetting, with supply sharply lower and pricing improving across much of the market, especially at the high end where Gem Diamonds operates. He emphasized that demand for the company’s goods has strengthened, the bottom of the market may have been found, and the company is benefiting from earlier cost-cutting as prices recover. His tone was cautiously optimistic, but he repeatedly pointed to external uncertainties such as the De Beers sale, the split between mined and lab-grown diamonds, and weak global macro conditions.

Michalakis Michael said the H1 results show a clear financial turnaround driven by the business resilience program and better pricing at Letšeng. He cited the 32% revenue increase to $59.7 million, the rise in average price to $1,395 per carat, the drop in cash cost of sales to $31.3 million, and the reduction in corporate costs to $2.5 million. He also highlighted improved liquidity, with cash at $20.2 million, borrowings at $20.6 million, net debt at $0.5 million, and about $17 million of undrawn facilities, while flagging refinancing of about $75 million to $76 million of facilities due in December 2026 as a key going concern assumption.

Analysts focused on how much supply has come out of the market, especially in higher-quality diamonds, and Elphick estimated that about 25% of the better goods may no longer be appearing, though he stressed the data is imperfect. Duncan Hay also pressed on whether full-year cost guidance was conservative after a strong H1; management said the team has already taken out the obvious savings and is now in a more sustainable range, with little remaining ‘fat’ to cut. In written questions, management said a dividend remains the intention if profits continue, but it is too soon to forecast timing; they also said EBITDA should be reasonably predictable from carat guidance, while realized diamond prices remain harder to forecast because quality mix can move results.