Tomei sees better sales due to lower price of gold
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Tomei sees better sales due to lower price of gold
Business & Markets 2013
Written by Zatil Husna of theedgemalaysia.com
Thursday, 16 May 2013 09:09
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KUALA LUMPUR: TOMEI CONSOLIDATED BHD [] foresees a further
increase in sales volume for its investment gold and gold jewellery due
to the lower price of gold.
“Our inventory has been reduced a lot due to sales picking up — which
has improved our liquidity. April was our best month ever,” Tomei
managing director Ng Yih Pyng told a press conference after the
company AGM yesterday.
“With the drop in prices, this is a good time to buy gold. In 2011 prices
peaked at US$1,920 per ounce. Today it is about US$1,400 per ounce,”
he said.
Tomei recorded a net profit of RM14.2 million for 2012 financial year
ended December (FY12), a 57% decrease from RM33.1 million in
FY11. The weaker earnings were due to fluctuations in gold prices and
higher operating cost.
The jewellery retailer said its company policy is to only purchase as
much gold as it can sell. It does not take any hedging positions.
“If we need one tonne of gold for our business, we will keep one tonne
of gold as our base.
“We are not in the commodity business, we are in the jewellery
business, hence we don’t need hedging,” Ng said in response to a
question from The Edge Financial Daily.
Apart from a drop in margin due to the fall in the price of gold, the group faces an increase in operating cost as a result of the
12 new shops it opened last year.
“We are focusing a lot on existing stores. There will be no big expansion plans in the next two to three years.
“Other than the drop in margin, our operating cost went up last year.
“The fall in the price of gold is beyond our control and it is something we have to monitor.
“Our focus is to try to achieve better sales growth and to improve our margin or at least maintain it,” said Ng.
According to chairman Tan Sri Ng Teck Fong, Tomei secured a franchise last December to retail diamond jewellery produced
by the London-based De Beers Diamond Jewellers Ltd.
Tomei has also been granted a franchise option to set up and operate De Beers retail outlets in Singapore, Indonesia,
Thailand and Vietnam.
Teck Fong said the group hopes to bring about a turnaround with the De Beers franchise this year.
Written by Zatil Husna of theedgemalaysia.com
Thursday, 16 May 2013 09:09
A + / A - / Reset
KUALA LUMPUR: TOMEI CONSOLIDATED BHD [] foresees a further
increase in sales volume for its investment gold and gold jewellery due
to the lower price of gold.
“Our inventory has been reduced a lot due to sales picking up — which
has improved our liquidity. April was our best month ever,” Tomei
managing director Ng Yih Pyng told a press conference after the
company AGM yesterday.
“With the drop in prices, this is a good time to buy gold. In 2011 prices
peaked at US$1,920 per ounce. Today it is about US$1,400 per ounce,”
he said.
Tomei recorded a net profit of RM14.2 million for 2012 financial year
ended December (FY12), a 57% decrease from RM33.1 million in
FY11. The weaker earnings were due to fluctuations in gold prices and
higher operating cost.
The jewellery retailer said its company policy is to only purchase as
much gold as it can sell. It does not take any hedging positions.
“If we need one tonne of gold for our business, we will keep one tonne
of gold as our base.
“We are not in the commodity business, we are in the jewellery
business, hence we don’t need hedging,” Ng said in response to a
question from The Edge Financial Daily.
Apart from a drop in margin due to the fall in the price of gold, the group faces an increase in operating cost as a result of the
12 new shops it opened last year.
“We are focusing a lot on existing stores. There will be no big expansion plans in the next two to three years.
“Other than the drop in margin, our operating cost went up last year.
“The fall in the price of gold is beyond our control and it is something we have to monitor.
“Our focus is to try to achieve better sales growth and to improve our margin or at least maintain it,” said Ng.
According to chairman Tan Sri Ng Teck Fong, Tomei secured a franchise last December to retail diamond jewellery produced
by the London-based De Beers Diamond Jewellers Ltd.
Tomei has also been granted a franchise option to set up and operate De Beers retail outlets in Singapore, Indonesia,
Thailand and Vietnam.
Teck Fong said the group hopes to bring about a turnaround with the De Beers franchise this year.
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