Johannesburg - Pallinghurst’s investment in luxury brand Fabergé is paying off as orders in the year to June gained 31 percent as it unveiled new products.
This is disclosed in Pallinghurst’s results commentary for the six months to June. Pallinghurst is a private equity company with investments in the mining sector.
It used to have a 49 percent investment in the luxury jeweller until January 2013, when Gemfields completed its merger with Fabergé, giving Pallinghurst 48 percent of the enlarged Gemfields.
Among products launched this year, says Pallinghurst, is the Fabergé Pearl Egg presented at the Doha Jewellery & Watches Exhibition in February 2015. This was the first egg created in the “Imperial Class” since 1917.
Fabergé’s luxury positioning adds consumer appeal to Gemfields’ products through the promotion of coloured gemstones, and increases demand in the coloured gemstone industry.
During the period, Gemfields bucked the global trend that has seen miners face challenging conditions as commodity prices are at multi-year lows and many mining houses are retrenching.
Pallinghurst says the entity reported record auction revenues of US$154 million in the year to June and saw increases in production at both its Kagem emerald mine in Zambia and its Montepuez ruby deposit in Mozambique. “This positive performance has been reflected in the Gemfields share price, which has risen by 30% in the first half of the calendar year.”
Gemfields has now held 19 auctions of emerald and beryl produced at Kagem which have generated revenues of $360 million. The four auctions of ruby and corundum produced at Montepuez have generated revenues of $122 million.
Pallinghurst, which focuses mostly on underperforming assets and businesses that lack direction, are poorly managed, stranded or distressed, adds its net asset value gained over the past six months and it recorded a net profit of more than $3 million.
CEO Arne Frandsen says “this result highlights the merit of holding three separate investment platforms, which has been our long-held strategic stance”.
Its platinum group metals unit, despite the challenges the sector has been through, reported record metal dispatches through its Sedibelo Platinum Mines unit. Increased volumes, and an improvement in metal recoveries, bolstered output 15 percent.
Pallinghurst also notes the year has been difficult for manganese producers, with significant price declines as a result of slowing demand from China.
“Despite the difficult backdrop, Tshipi Borwa completed its ramp up, more than doubling its production and exports to over two million tons of manganese ore in its financial year to February 28, 2015. Tshipi Borwa recorded its second consecutive year of profit, a significant achievement in a low price environment and is again on track to export two million tons for the financial year to February 28, 2016.”
However, the low iron ore price has led Jupiter Minesto placing its Mount Ida magnetite and Mount Mason hematite projects in the Central Yilgarn region of Western Australia on care and maintenance. “Jupiter continues to monitor the iron ore market and is ready to restart work on these projects once market conditions are favourable.”
IOL