Lazurde turns to losses in FY2019

Lazurde Company for Jewelry (Lazurde) reported a net loss after Zakat and tax of SAR 17.5 million for fiscal year 2019, from a net profit of SAR 17.7 million a year earlier, the company said in a bourse statement.

The net loss was attributed to several one-off items, such as accepted sales returns of the heavy weight gold jewelry on less demand due to high gold price, and increase in financing costs of existing gold facilities by SAR 2.6 million on the back of high gold prices.

In addition, adoption of new accounting standard (IFRS 16) with effect from 1 January 2019 also resulted in higher financing costs by SAR 4.5 million.

On the other hand, operating profit for 2019 declined by 33% year-on-year to SAR 46.7 million, compared to SAR 69.9 million in the year earlier, due to the one off costs of accepting the sales returns of heavy weight gold jewelry.

Operating profit was also impacted by booking an exceptional provision amounting to SAR 17.8 million on the back of the closure of 5 retail shops in the Kingdom for the purpose of rationalizing and optimizing the retail network, the statement also said.

In Q4 2019, the company reported a net loss of SAR 41.9 million compared to a net profit of SAR 0.12 million in Q4 2018.