L’azurde Company for Jewellery (“L’azurde” or “the Company”), the largest gold and jewelry designer, manufacturer, distributor and retailer in the Middle East, announced today its fourth quarter and year-end 2017 financial results.
Fourth Quarter 2017 Results
L’azurde’s operating revenues for the fourth quarter of 2017 amounted to SAR 75.1 million, an increase by 62.3% compared to the same quarter of 2016. Growth was mainly driven by a 61.1% increase in wholesale business, where KSA increased by 69.6% and Egypt by 48.7%. Additionally, there was an increase in retail business by 63.8% coming from the KSA Retail operation at +61.8% and Egypt growth by +78.7% due to opening new shops.
Operating expenses were reduced by 23% to SAR 32.8 million in the fourth quarter of 2017 compared to SAR 42.6 million in the same period the prior year as a result of cost reductions and despite costs incurred to finance Retail expansion in this quarter.
Net income for the fourth quarter of 2017 amounted to SAR 2.6 million, an increase of SAR 3.4 million compared to Q4 of 2016. The increase was due to solid top-line growth, reduction of operating expenses by 23% and lower finance chargers in the fourth quarter of 2017 compared to the same in of 2016.
Commenting on the results, Sélim Chidiac, CEO of L’azurde, said: “We have concluded 2017 with a strong fourth quarter. In 2017, we have managed to introduce new jewelry collections, open new retail shops at top locations, drive our technology innovations and enhance operational improvements. We were successful at evolving our strategy to expand our business towards a L’azurde Group ‘house of brands’ model where we manage our own L’azurde and Kenaz retail stores as well as building our first franchise brand, Amazing Jewelry.”
“2017 was a year where we have set in place the fundamentals of our new strategy for growth. With these initiatives in place, we are confident that L’azurde is well positioned to compete and lead in the region’s jewelry market while delivering profitable growth. We started 2018 with the appointment of a new celebrity in to the L’azurde family, Egyptian movie star, Nelly Karim. As we move forward in 2018, we will continue to expand our business developing both our wholesale and retail operations while capturing new growth opportunities,” added Chidiac.
Full Year 2017 Results
L’azurde operating revenues for the full year of 2017 amounted to SAR 355.4 million, a decline of 12.3% compared to 2016 (SAR 405.4 million). L’azurde Operating income for 2017 came at SAR75.3 Million a 10.7% increase versus 2016. Net Income for the full year of 2017 was SAR 31.5 million, a decline of 56.2% on 2016. This was due to the one-off gain in 2016 from foreign exchange of SAR 59.8 million. Excluding this gain in 2016, net income for 2017 would be SAR 19.4 million higher than net income in 2016.
KSA growth was driven by a 5.9% increase in operating revenues compared to last year due to growth in L’azurde retail and the new Kenaz diamonds jewelry value brand. However, this was offset by a 34.3% decline in Egypt revenues, due to the Egyptian Pound devaluation that took place in November 2016, and a 29.1% decline in exports due to the regional macro-economic situation.
Operating expenses were reduced in 2017 by 19.4% to SAR 142.2 million as the Company focused on optimizing production, reducing staff costs, financing expenses and direct selling even though the Company was funding the retail expansion.