L’azurde financial results for FY 2016

L’azurde Company for Jewellery (“L’azurde” or “the Company”), the largest gold and jewelry designer, manufacturer, and distributor in the Middle East, announced today interim financial and operational results for the year ended 31st December 2016.

The Company reported operating revenues of SAR 405.4 million for year ended 31st December 2016, resulting in a Net Income of SAR 74.6 million. Efforts to reduce costs resulted in a decrease in General and Administration expenses by 18.4%. In addition, the company managed to defend gross profit margin of 60.2% in 2016, slightly lower than the same period of last year (64%), despite volume reduction.

The results for 2016 reflect a sharp fall in consumer spending in relation to the slowing economy. The impact of the slowdown mostly impacted the last two quarters of the fiscal year of the company. Nonetheless, the company took proactive measures to respond to these macroeconomic challenges by:

• Launching 14 Karat Gold jewelry lines in Egypt and for the first time in the Middle East, offering consumers unique designs at more affordable prices. The 14 Karat gold jewelry has so far been well received in Egypt
• Introducing a second jewelry brand in Saudi Arabia called ‘Kenaz’, a value jewelry brand, offering a wide range of top diamond jewelry designs targeting new consumer segments
• Expanding the Retail division at top locations in KSA and in Egypt. L’azurde also started for the first time a collaboration with the Saudi Catering Company to sell jewelry at Airports
• Leveraging technology and manufacturing capabilities to launch new fashionable and classic jewelry at lower weights offering consumers great products at more affordable price points.
• Improving manufacturing efficiency and reducing costs through the organization, enabling the Company to support its margins

Commenting on the results, Sélim Chidiac, CEO of L’azurde, said: “Last year was a year of adjustment to the continued pressure on consumer spending from the sustained low oil prices impacting our core markets. This was particularly prevalent in the luxury goods segment. Our financial results are therefore indicative of challenging macro-economic conditions. However, we remain positive about the future as we evolve our group strategy with the introduction of new initiatives that will further enhance L’azurde’s brand and leading position in our core markets.”

“Over the last 40 years L’azurde has weathered several economic cycles and has maintained its position as a market leader with a strong and loyal customer base. With the new innovative initiatives, adapted to today’s environment, in addition to the underlying fundamentals supporting the jewelry industry in the long term, we believe that L’azurde remains in a strong position to continue its longer term growth ambitions.”