Gem Diamonds posts 31% fall in H1 pretax profit

Gem Diamonds Ltd has announced its financial results, with a 31 percent drop in its first-half pretax profit on lower revenue. In the first half ending June 30, 2009, the company noted $17.2 million worth of pretax profit, as compared to $25.2 million profit in the same months last year. Its revenue declined 29 percent to $117.8 million and gross cash valued $120.5 million. The company had no debt at end-June.

The company is optimistic about its second-half profit to be higher, when it expects rough diamond prices to improve slightly if not too much, after being weak from last year until the first quarter of 2009. It is looking at increase in diamond demand in China and Asia excluding Japan. While the total of these market demands is not sufficient to overlap its U.S. market diamond demand, the company is keeping a close watch on the U.S. markets. It has seen increased demand for diamond wedding jewellery in the Middle East, Asia and the United States.

Following the economic slowdown the company had put its mines on care and maintenance and is not likely to resume production at current diamond prices, reports say.