Gem Diamonds Limited (LON: GEMD) shares surged 42% in the first 30 minutes of trading after the diamond producer reported a sharp improvement in first-half profitability, higher revenue and a substantial reduction in net debt.
Revenue for the six months ended 30 June 2026 increased 32% to US$59.7 million, compared with US$45.4 million a year earlier, supported by stronger diamond prices and improved production quality at the Letšeng mine.
Underlying EBITDA swung to a positive US$8.6 million, compared with negative EBITDA of US$2.6 million in the first half of 2025.
Gem Diamonds also returned to the black at the bottom line, recording an attributable profit of US$0.6 million, against a US$11.7 million loss a year earlier. Earnings per share improved to 0.5 US cents from a loss of 8.4 cents.
The group’s balance sheet strengthened considerably during the period. Cash increased to US$20.2 million from US$3.8 million at the end of December, while net debt fell by US$19.6 million to just US$0.5 million, from US$20.1 million.
At Letšeng, 2.6 million tonnes of ore were treated compared with 2.5 million tonnes a year earlier, although diamond recovery declined to 41,695 carats from 47,125 carats.
The impact was more than offset by significantly stronger pricing, with the average price achieved rising 38% to US$1,395 per carat, from US$1,008 per carat. The highest price achieved for a white rough diamond during the period was US$32,908 per carat.
Waste mining also dropped sharply to 0.3 million tonnes from 1.7 million tonnes, reflecting the mine plan and helping the company control costs.
Chief executive Clifford Elphick said the first-half improvement reflected stronger diamond prices and improved production quality, alongside the benefits of cost reductions introduced in July 2025.
He added that the extension of Letšeng’s royalty relief and structural cost measures had materially reduced the group’s cost base, helping Gem Diamonds improve profitability despite continued weakness across the global diamond market.
Gem Diamonds maintained its 2026 production and cost guidance, although its revolving credit facilities expire in December and discussions with lenders regarding their renewal or extension are underway.
