Gem Diamonds Ltd on Thursday said lower average diamond prices and grid electricity disruptions hurt its half-year results.

In the six months to June 30, the diamond producer with diamond mining operations in Lesotho and Botswana said pretax profit fell by 71% to $3.9 million from $13.4 million a year prior, as revenue from contracts with customers plunged by 28% to $71.8 million from $100.0 million the year before.

Gem Diamonds cited a decline in the global rough diamond market, saying that a drop in the number of high-value diamonds recovered, as well as market pressure, ‘negatively impacted’ average diamond prices during the first half of the year.

The average diamond price in the six-months to June was $1,373 per carat, 21% lower than $1,745 during the same period a year ago.

This is a significant change from a year ago, when the company touted an optimistic outlook and a ‘firm diamond market’.

Grid electricity disruptions also caused a reduction in the number of ore processed, Gem Diamonds said.

The firm did not declare an interim dividend, unchanged from a year ago.

Looking ahead, the company said it will focus on mitigating the impact of the ‘significant increase in operating costs experienced over the past 18 months.’

Shares in Gem Diamonds were down 4.0% at 17.00 pence each in London on Thursday morning.

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