Gemfields Group (GML) H2 2025 earnings summary

Executive summary

• 2025 was the weakest year for auction revenues since 2013, at only 41% of the 2022 peak, due to operational and market disruptions, including PP2 reliability issues and reduced premium ruby grades at MRM.

• Major challenges included a sharp decline in Chinese luxury demand, civil unrest in Mozambique, and a surprise Zambian export duty.

• Kagem auctions remained resilient, supporting overall group performance despite market volatility.

• Despite these, operational and strategic actions have strengthened the group's footing for 2026, with priorities on stabilising operations, restoring auction cadence, rebuilding cash generation, and deleveraging.

Financial highlights

• Group revenue was $135.1 million, down from $199.4 million in 2024 and $246.4 million in 2023.

• EBITDA fell to $6.25 million, with adjusted EPS at -$0.013 and a free cash outflow of $29.2 million.

• Net debt at year-end was $39.3 million, or $18.7 million including auction receivables.

• Kagem generated $78 million in auction revenue, nearly $40 million after costs and CapEx.

• MRM ruby revenue was $50 million, but Q1 2026 already exceeded this with $53 million.

Outlook and guidance

• CapEx is tapering as the MRM second processing plant (PP2) nears completion, with some fleet purchases remaining for 2026.

• Final commissioning of PP2 is now expected in Q3 2026 due to technical delays.

• Focus areas for 2026: stabilize operations, resolve PP2 issues, rebuild auction revenues, restore profitability, and deleverage.

• Next Kagem emerald auction is scheduled for May 2026; next ruby auction expected in Q3.

• Emerald production has recovered since May 2025; ruby demand remains muted, especially in lower quality segments.