L’azurde Company for Jewelry (“L’azurde” or “the Company”),the largest gold and jewelry designer, manufacturer, wholesaler and retailer in the Middle East, announced today its financial results for the second quarter of 2018 and the six months ended June 30 2018.
Second Quarter 2018 Results
A solid quarter performance for L’azurde with operating revenues for the second quarter of 2018 amounting to SAR 92.8 million, an increase of 12.9% compared to the same quarter in 2017.Operating income of SAR 17.4 million for Q2 2018was higher by 10.4% compared to SAR 15.7 million in Q2 2017. Gross profit of SAR 56.0 million for Q2 2018 was higher by 8.4% compared to SAR 51.6 million in Q2 2017.
Growth was primarily driven by an outstanding performance in L’azurde’s wholesale business in Egypt, reporting an 85.7%increase due to a successful advertising campaign and positive recovery in the economy and purchasing power, and an equally good performance of 123.9% increase in Egypt retail revenues due to the same reasons, in addition to opening new shops. However in KSA, both wholesale and retail businesses declined by 10.9% and 11.3% respectively compared to Q2 2017, due to reduction in consumer spending.
Half Year 2018 Results
Overall, L’azurde operating revenuesfor the first half of 2018 showed the company’s resilience to the environment and amounted to SAR 207.8 million, an increase of 1.8% compared to H1 2017 (SAR 204.1 million). However, L’azurde operating income for H1 2018 totalled SAR 40.4 million, a 20.1% decline compared to the first half of 2017 because of marketing investments and expansion in retail in Egypt. Net Income for H1 2018 was SAR 13.9 million, a decline of 51.2% on H1 2017. This was due to lower gross profit and higher expenses, including one-off costs of legal, financial and commercial due diligence for an acquisition assessment and valuation.
L’azurde’s gross profit, operating income and net income in the first half of 2018 represented 59.9%, 19.4% and 6.7% of operating revenues compared to 61.6%, 24.8% and 13.9% in the first half of 2017.
Commenting on the results, Sélim Chidiac, CEO of L’azurde, said: “We are pleased to see a recovery of the economy in Egypt where L’azurde has a strong leadership position and was ready to capitalize on this change. In KSA, we believe that the market is evolving in a way that will result in the leading brands gaining share during this difficult time of change. Also, the government initiatives, employment of women, young population and increased foreign investments will support the industry, consumer confidence and spending.We are investing to diversify our revenues and build our retail segment where we have a higher return on investment.
“We have solid initiatives for the remainder of the year aswe plan to control our expenses, expand our retail business by introducing new jewelry collections, leveraging the growth in Egypt, opening our subsidiary in Oman, fully developing and expanding the new diamond jewelry value brand Kenaz across the region, and the new Saudi airports business. By delivering exceptional products and experiences to our customers in the region, we remain focused on boosting sales, operating revenues, and generating stronger and greater value for shareholders despite tough market conditions,” added Chidiac.
L’azurde’s interim financial results for the six months ended June 30 2018 can be found here: