Damas International Q2 profit grows 20%

DAMAS PROFITS: Dubai jewellery group Damas International posted second-quarter profit growth of at least 20 percent over the same period last year. (Getty Images)

Dubai jewellery group Damas International, whose shares listed on Tuesday, said second-quarter profit grew at least 20 percent as the firm moves to expand in the Middle East and Asia.

Family-controlled Damas is planning extensive branch expansion and eyeing acquisitions in China after raising $271 million in an initial public offering this month, executives said on Tuesday.

"We've been achieving an average of 15.5 percent growth in the past 10 years... and we expect Q2 figures to be at least 20 percent higher than the same period last year," Damas Chief Executive Tawhid Abdullah told a gathering in Dubai.

He did not give a comparative figure. Damas made net profit of 209.1 million dirhams ($56.93 million) in 2007 and 69.7 million dirhams in the first quarter of this year.

Damas, which could raise up to $311 million if an IPO over-allotment option is exercised, aims to open about 100 new stores each year for the next few years, Abdullah said.

Currently operating in 18 countries, Damas should have 569 stores by the end of the year, up from 438 now, Abdullah said.

Damas, the first retail company to list on the Dubai International Financial Exchange (DIFX), priced the IPO shares at $1 each, the bottom end of an initial range.

No Damas shares had changed hands by 0830 GMT on the DIFX exchange, where they were quoted at a mid price of $1.08.

The firm is also looking at acquisitions as a means of expansion, Damas group chief financial officer, P.K. Dutta, told Reuters.

On the outlook for profit in 2008, Dutta said, "It will be significantly higher compared with the same period last year, on higher demand for jewellery, watches and IPO proceeds."

"We'll be looking for small acquisitions in places like China for gold and jewellery manufacturing," he added, declining to give details.

The listing priced the shares at about 17.2 times 2007 earnings, according to Reuters calculations.

Damas could consider a secondary listing after six to eight months, Dutta said.

"I'm not expecting the stock will perform miracles on its first day of trading," said Mohamed Alami, head of the international desk at Dubai-based Naeem Shares & Bonds.

"Investors are not getting value for their money at this P/E, but it is also not expensive. It is a good medium-term holding," he said. (Reuters)

Print | Email | Discuss this article |

USER COMMENTS (0 COMMENTS)

POST A COMMENT

CLICK HERE TO POST A COMMENT

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Security Code *
Please click post only once - your comment will not be published immediately.