Damas announces full year net profit of AED 9.7 million, before significant one-offs
Damas International Limited (Damas), the leading retail jewellery company in the Middle East, announced today its financial results for the 12 months ending March 31, 2010, demonstrating the strength of its core operations despite challenging conditions facing the gold and jewellery sector worldwide.
For the 12 months ending March 31, 2010, Damas reported a net profit of AED 9.7 million before considering the impact of non-recurring expenses and impairments, reflecting the vitality of the company’s underlying business model.
During the same period, the company reported a full year net loss of AED 1.91 billion, primarily due to the conservative and prudent approach adopted by the company. Significantly, the company’s full year financial results include provisions and non-recurring charges totalling AED 1.92 billion.
In making these provisions, Damas is recognising the challenges of the past 12 months while ensuring that the company’s efforts are focused on recovering outstanding receivables held by counterparties in an orderly manner, building a stable platform for future growth.
“Founded more than a century ago as a family-run firm, Damas has now instutionalised best practice management practices, and is also currently carrying out a wide range of corporate governance enhancements,” said Anan Fakhreddin, Chief Executive Officer, Damas International Limited. “In line with those international standards, today’s announcement makes clear the healthy performance of the core business of Damas, while also reflecting our prudent approach to provisioning.”
As a demonstration of the company’s commitment to its corporatisation, Damas earlier this year appointed a new Board of Directors, primarily composed of independent members who are leaders in their respective fields. The Board and management are focused on ensuring the sustainability of the company’s long-term business model, while also keen to ensure that Damas remains an employer of choice through the introduction of best practice human resources initiatives.
As a consequence of the impact of the global financial crisis, lower consumer confidence and higher gold prices, Damas witnessed a decline in total sales volumes during the 12 months ending March 31, 2010. Nevertheless, the company maintained a healthy gross profit margin of 17 per cent during the same period, reflecting the quality and appeal of its products and services.
For the full year ending March 31, 2010, Damas reported a decline in annual revenues to AED 3.3 billion, down 31 per cent from the previous 12-month period. For similar reasons, gross profits declined by 33 per cent compared to the previous period, standing at AED 565 million for the 12 months ending March 31, 2010.
“Damas continues to move forward with its financial restructuring, demonstrating the confidence of our bank lenders in the strength of the company’s underlying business model, while also preparing for the implementation of our operational restructuring, which will allow the company to sustain its growth trajectory despite current challenging conditions,” said Fakhreddin.
“The business outlook of Damas is strong,” he said. “The Board of Directors and management of Damas look forward to continuing to achieve positive operational performance, enhancing sales and introducing products, services and promotions that meet the needs of our customers here in the Middle East and across the world, while delivering optimum value to our stakeholders.”