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RAPAPORT... Kingold Jewelry Inc. reported that revenue fell 11.6 percent year on year to $251 million in the third quarter that ended on September 30. The company stated that over the past nine months, the decline in gold prices alone have resulted in a $97.3 million drop in revenue figures. Gross margin as a percentage of sales fell to 4 percent compared with 5.9 percent one year earlier. Profit fell to $5.2 million compared with $11 million.
ZhiHong Jia, the CEO of Kingold, said, "Kingold has continued to report profitable results despite a challenging gold market. We processed 14.5 metric tons of gold during the quarter and continue to increase our sales volume by expanding our sales channels both in China and overseas. However, we are continuing to focus on properly balancing our product mix and focusing on customized production, which increased as a percentage of our overall business during the quarter. We believe that this will enable Kingold to both leverage its expertise in design and manufacturing as well as help to alleviate its inventory risk.
"We are working diligently to ensure that the company is well-positioned to grow despite gold pricing headwinds. We believe that our business is a flexible and sustainable model and have been pleased to see steady demand from our customer base. We remain on track to meet our projected gold processed volume of between 60 metric tons and 70 metric tons during 2014," he concluded.
In addition, Kingold told shareholders that construction of the Kingold International Jewelry and Cultural Industry Park is continuing and that the firm is working aggressively on pre-leasing rental spaces. Kingold anticipates utilizing advanced rental fees and capital from the presales to further enhance the construction of the Jewelry Park.
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