L’azurde announces SAR 73 million Net Income for the nine months period ended 30th September 2016

’azurde Company for Jewelry (“L’azurde” or “the Company”), the largest gold and jewelry designer, manufacturer, distributor and retailer in the Middle East, today announced interim financial results for the nine-month period ending 30th September 2016.

The Company reported revenues of SAR 359.1 million for the first nine months of the year, a decline of 18.6% on the same period last year (SAR 441.2 million). Net Income for the period was SAR 73 million, a decline of 17.8% on 2015 (SAR 88.7 million). The numbers reflect a sharp drop in consumer spending across all markets.

To confront challenging market conditions, management was able to reduce costs by improving manufacturing efficiency, negotiating lower prices for raw materials and reducing other operating expenses, leading to a 19% reduction in operating costs.

Sélim Chidiac, CEO of L’azurde, said: “L’azurde’s performance in the first nine months of the year reflects the wider economic challenges in our core markets. The impact of sustained low oil prices, government cutbacks and austerity measures has led to a significant drop in consumer spending.

“Against this backdrop, we have adapted our strategy to ensure L’azurde is a more resilient business. Leveraging our technology and manufacturing capabilities, we have introduced new jewelry lines to cater for more price conscious customers. We have also unveiled, for the first time in our history, a second jewelry brand in Saudi Arabia, Kenaz, which caters to customers seeking top diamond jewelry designs at great value for money. Kenaz has been an instant success and we expect to see the brand grow in 2017. In Egypt, L’azurde’s 14 Karat Gold jewelry line has been well received and we would expect the financial impact from this to be felt in 2017. At the same time we started looking at potential mergers and acquisitions. Given the current environment, there could be interesting targets where L’azurde could add value.”

“The Company’s retail operation continues to expand, with five lease agreements signed for showrooms in Saudi Arabia and Egypt, and we remain committed to improving efficiencies and productivity within the business. Underpinned by the region’s youthful demographic and the sustainable wedding jewelry demand, the long-term picture in our core markets is extremely bright leading us to be confident that L’azurde will emerge from the current headwinds in a position of strength.”