Dubai-based jewellery retailer booked significant provisions after 'challenging 12 months'.
Damas International Limited on Sunday posted a full-year net loss of AED1.91bn ($523m), as the Dubai-based jewellery retailer booked significant provisions it blamed on a “challenging 12 months”.
Damas, one of the UAE’s largest jewellery groups, reported a net profit of AED9.7m for the twelve months to March 31, 2010, ahead of provisions and non-recurring charges totalling AED1.92bn.
“In making these provisions, Damas is recognising the challenges of the past 12 months while ensuring that the company’s efforts are focused on recovering outstanding receivables held by counterparties in an orderly manner,” the firm said in a statement.
Damas reported a decline in annual revenues to AED3.3bn, down 31 percent from the same period a year earlier. Gross profits declined by 33 percent compared to the previous period, standing at AED565m.
The Dubai retailer, which has more than 400 stores around the world, blamed the global downturn, low consumer confidence and raised gold prices for a decline in total sales volume.
Damas last month signed an extension to a standstill agreement on $872m of debt with most of its bank creditors. In a statement to Nasdaq Dubai, the firm said the standstill accord has been extended until September 30 to allow the company to complete its restructuring plan.
“Damas continues to move forward with its financial restructuring, demonstrating the confidence of our bank lenders in the strength of the company’s underlying business model, while also preparing for the implementation of our operational restructuring,” said Anan Fakhreddin, chief executive officer, Damas International.
The Dubai-based firm is attempting to recover $165m lost in “unauthorised transactions” from its founders, the Abdullah Brothers.
Damas was reprimanded by Dubai’s regulator in March, which ordered the firm to dismiss the board and pay fines for failing to exercise proper governance.
The three Abdullah brothers, Tawhid, Tawfique and Tamjid Abdullah, missed the first scheduled repayment of $55m due in April.
The jeweller appointed the company's founding brothers as senior advisors in June, three months after Dubai's regulator ordered their dismissal on financial irregularities.