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DURBAN - Gemfields' share price slid by more than 4percent on JSE after it said in a trading update that its profits after tax would decline by at least 22.5percent for the six months to end June. The gemstone mining company did not provide reasons for the expected decline in profits. The share price later closed 2.55percent lower at R1.61.

The group said yesterday that it expected its net profit after tax to be $12.4million (R182.56m) compared to a net profit after tax of $16m reported last year.

However, Gemfields said its two key operating assets, MRM and Kagem, generated revenues of $50m and $33.2m respectively during the period compared to $71.8m and $21m generated a year ago.

Fabergé recorded revenues of $3.8m compared to last year’s $7m. “During the period the company entered into an agreement to sell its entire stake in Jupiter Mines receiving 50percent of the sale proceeds during the period with the remaining 50percent of the sale proceeds due in November,” the group said. Gemfields added that it additionally received a dividend from Jupiter of $2.6m and recorded mark-to-market gains of $7.6m from its Jupiter holding during the period due to a rise in the Jupiter share price from the beginning of the period.

In April Gemfields sold its stake in Jupiter Mines, a steel feed company listed in Australia, for $31.6m. Its earnings per share and headline earnings per share were expected to be 0.11cents a share in rand terms compared to last year’s 0.12c. Gemfields expects to release its results on Friday.