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RAPAPORT...
Kingold Jewelry reported its first-quarter revenue soared 42 percent year on year to $225 million for the three months that ended on March 31, while cost of sales jumped 44 percent to $213 million. Net profit rose 32 percent to $7.3 million. The company's revenue increase was primarily driven by higher prices for gold and a greater number of sales for branded jewelry. Gross margin for the period was 5.1 percent, which was down from 5.7 percent one year earlier, because gold prices increased nearly 9 percent while the company could not raise its processing fee proportionally, according to its financial statement. Kingold processed approximately 8.84 metric tons [one metric ton = 35,274 ounces] of 24-karat gold products in the quarter, representing a year-on-year increase of 17.6 percent. Zhihong Jia, the chairman of Kingold, stated, ''We continued to see strong growth in our sales volume during the first quarter of 2012, particularly from our investment gold business. We continue to gradually shift resources to support demand from our bank partners, and were pleased that this has helped serve as a new driver for sales.'' Kingold is now distributing products from its investment gold business to several provinces and municipal locations throughout China, including Beijing, Hubei, Jiangsu, Jiangxi, Liaoning, Zhejiang, Henan and Sichuan. New clients of Kingold during the quarter included Harbin Hengyuan Gold Corp., Hangzhou Xingya Jewelry, Wuxi Yinglou and Datong Jintai Jewelry. ''We were also pleased to receive a AAA credit rating from the Gems & Jewelry Trade Association of China, which we feel is a testament to our reputation in China's jewelry industry and strong financial position,'' Jia said.
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