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Gitanjali's 2Q Revenue -24%, Profit -74 %
Restrictions on Gold Erode Jewelry Sales
Nov 17, 2013 7:58 AM
By Deena Taylor
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RAPAPORT... Gitanjali Gems Ltd. reported that its revenue declined 24 percent year on year to $477.9 million (INR 30.04 billion) in the second quarter that ended on September 30. The company's earnings dropped 74 percent to $6.5 million (INR 405.7 million) as financing costs jumped 80 percent to $29 million (INR 1.8 billion).
The company noted that gold import curbs implemented by the Reserve Bank of India also negatively impacted business.
“Due to non-availability of gold, Gitanjali continues to realign its
business toward diamond and gemstone jewelry," said Mehul Choksi, the
chairman and managing director of Gitanjali Gems. "The company
plans to capitalize on the tremendous recall its brands enjoy and extend
the brands to include a small portion of lifestyle categories in its
portfolio.”
Revenue by segment reflected strong diamond sales, which rose 39 percent to $370.9 million (INR 23.3 billion), while jewelry sales declined 48 percent to $203.8 million ( INR 12.8 billion). Intersegment revenue, which is subtracted from reported revenue, surged 215 percent to $99.5 million (INR 6.2 billion).
Gitanjali intends to add platinum, precious stones and silver jewelry categories to increase its international business. The company anticipates its next phase of growth will come from expansion in the U.S., Middle East, Japan and China.
During the first half of the fiscal year, revenue decreased 5 percent to $1.1 billion (INR 62.9 billion), while profit plunged 75 percent to $12.2 million (INR 768.9 million). By segment, diamond sales grew 36 percent to $725.8 million (INR 45.6 billion), while jewelry sales dropped 22 percent to $533.3 million (INR 33.5 billion).
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Tags:
Deena Taylor, diamond, diamonds, Gitanjali, gold, Jewelry
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