Business & Money | Monday 11 March, 2019 3:00 am |

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 year-end 2018 financial results.

 

L’azurde operating revenues for the full year of 2018 amounted to SAR 406.4 million, an increase of 14.4% compared to 2017.  This represents an excellent performance against a mixed market backdrop where some challenges remain. In Egypt, L’azurde continued to record strong revenue growth with a 51.2% increase in the wholesale business helped by the recovery in the economy and purchasing power, and revenue growth of 154.1% in retail with the opening of five new shops also supporting the significant increase. Meanwhile in KSA, wholesale revenues declined by 10.9% mainly due to the introduction of VAT which affected the industry, especially in the first quarter of 2018. However, retail revenues increased by 1.7% reflecting the benefit of two months of revenues from TOUS, having completed the acquisition at the end of October 2018 and the growth at L’azurde’s airports retail business as well as the Kenaz kiosks.

Gross profit for the year increased by 12.2% to SAR 244.1 million from SAR 217.5 million in 2017 due to higher operating revenues. Operating expenses increased by 22.5% to SAR 174.2 million in 2018 compared to SAR 142.2 million as a result of higher marketing expenses and higher variable expenses related to higher revenues, in addition to the operating expenses of TOUS from the date of acquisition. Also contributing to operating expenses were the additional costs of the retail expansion in Egypt and additional staff-related costs in KSA including the increases in expat levies.

 

Net income for 2018 amounted to SAR 17.7 million versus SAR 31.5 million in 2017 due to higher expenses, which included a one-off cost for due diligence on the TOUS acquisition. Excluding this one-off cost, net income for 2018 was SAR 23.1 million, a decrease of 27.0% compared to 2017.

 

Commenting on the results, Sélim Chidiac, CEO of L’azurde, said: “2018 has been a challenging year for L’azurde in our home market of Saudi Arabia, as it was for many other companies. Our businesses in Egypt, however, continued to perform strongly and it was a year of several strong achievements which will position us well for the future. Principal among these was our acquisition of the KSA franchise of the Tous international jewelry brand. This establishes us with a strong position in the fastest growing sector of the jewelry industry, the accessible jewelry segment. The acquisition diversifies our opportunities for growth and will add significantly to our profits in 2019 and beyond.

 

“We have solid initiatives for 2019 as we plan to revitalize our wholesale business through the launch of new collections supported by celebrities, expand the TOUS franchise business in KSA, develop our L’azurde retail business in Egypt and leverage technology and 3D printing capabilities to optimize production costs. In addition, we plan to obtain in 2019 a full endorsement and confirmation of our business compliance with Shariaa provisions,” added Chidiac.