1. Group operating revenues for the second quarter of 2019 were SAR 132.8 million, an increase of 43.1% compared to SAR 92.8 million in the same quarter of last year.

In KSA, wholesale revenues increased by 8.8% compared to the same quarter of last year, due to successful new collections and celebrity endorsement campaign, while retail revenues witnessed a significant increase of 129.0% mainly due to consolidation of revenues of the recently acquired TOUS franchisee and a growth at L’azurde retail shops.

Egypt’s revenues continued to perform strongly, for the seventh quarter in a row, with a growth of 20.1% in the wholesale channel due to a successful advertising campaign and strong customer uptake of new collections and in retail channel by 64.4% compared to the same quarter of last year due to the successful opening of seven new outlets during the last twelve months.

2. On quarterly basis, the group operating revenues continued to improve for the fifth quarter in a row. The last five quarters revenues increased by 13%, 29%, 33%, 33% and 43% respectively compared to same quarters’ of last years.

3. Gross profit of SAR 80.8 million for the second quarter of 2019 was 44.3% higher than the same quarter of last year of SAR 56.0 million mainly due the significant increase in operating revenues.

4. Operating expenses of SAR 52.7 million for the second quarter of 2019 were 36.6% higher than the same quarter of last year of SAR 38.6 million mainly due to higher marketing expenses, higher variable expenses related to higher revenues, consolidating operating expenses of TOUS, operating costs of new retail shops in Egypt and restructuring of the work force and associated training costs to meet the Saudization/Feminization requirements. Excluding the newly acquired business of TOUS, the increase in operating expenses would have been 11.8% compared to the same quarter of last year.

5. Operating profit of SAR 28.0 million for the second quarter of 2019 was higher by 61.6% compared to SAR 17.4 million in the same quarter of last year due to higher operating revenues as described above.

6. Net profit for the second quarter of 2019 amounted to SAR 12.2 million, an increase of 151% compared to SAR 4.8 million of net profit for the same quarter of last year due to higher operating revenues and gross profit.

7. Gross profit, operating profit and net profit for the second quarter of 2019 represented 60.8%, 21.1% and 9.2% of operating revenues exceeding those for the same quarter of last year of 60.3%, 18.7% and 5.2% respectively.

8. For the second quarter of 2019, the Comprehensive Income attributable to shareholders of the Company amounted to SAR 15.6 million, increasing by 317% compared to Comprehensive Income of SAR 3.7 million in the same quarter of last year.

2. Net income of SAR 12.2 million for the second quarter of 2019 was 2% higher than the net income of the first quarter of 2019 of SAR 12.0 million due to lower operating expenses in the second quarter of 2019.

3. For the second quarter of 2019, the Comprehensive Income attributable to shareholders of the Company amounted to SAR 15.6 million, increasing by 6% compared to Comprehensive Income of SAR 14.7 million in the previous quarter.

1. Group operating revenues for the six months period ended 30 June 2019 were SAR 285.8 million, an increase of 37.5% compared to SAR 207.8 million in the same period of last year.

In KSA, wholesale revenues increased by 17.1% compared to the same period of last year due to successful new collections and celebrity endorsement campaign, while retail revenues increased by 86.0% mainly due to the consolidation of revenues of the recently acquired TOUS franchisee.

Egypt’s revenues continued to perform strongly with growth of 19.2% in the wholesale channel due to a successful advertising campaign and strong customer uptake of new collections. Egypt’s retail revenues increased by 60.1% compared to the same period of last year due to the successful opening of seven new outlets during the last twelve months.

2. Gross profit of SAR 176.8 million for the period was 42.0% higher than the same period of last year of SAR 124.4 million mainly due to higher operating revenues. Gross Profit as a percent of operating revenues also improved by 2.0% due to cost saving initiatives that contributed in reducing production costs.

3. Operating expenses of SAR 118.3 million for the period were 40.8% higher than the same period of last year of SAR 84.0 million mainly due to higher marketing expenses, higher variable expenses related to higher revenues, consolidating operating expenses of TOUS, operating costs of new retail shops in Egypt and restructuring of the work force and associated training costs to meet the Saudization/Feminization requirements. Excluding the newly acquired business of TOUS, the increase in operating expenses would have been 16.4% compared to the same period of last year.

4. Operating profit of SAR 58.4 million for the period was higher by 44.7% compared to SAR 40.4 million in the same period of last year due to higher operating revenues as described above.

5. Net profit for the period amounted to SAR 24.1 million, an increase of 73.8% compared to SAR 13.9 million of net profit for the same period of last year due to higher operating revenues and higher gross profit, despite an increase of SAR 2.1 million in Egypt subsidiaries corporate tax expenses.

6. Gross profit, operating profit and net profit for the period represented 61.8%, 20.4% and 8.4% of operating revenues exceeding those of the same period of last year of 59.9%, 19.4% and 6.7% respectively.

7. For the period ended on 30 June 2019, the Comprehensive Income attributable to shareholders of the Company amounted to SAR 30.3 million, increased by 85.8% compared to Comprehensive Income of SAR 16.3 million in the same period of last year.

8. Basic Earnings per Share (“EPS”) based on profit attributable to shareholders of the Company for the period was SAR 0.56, increased by 75% compared to SAR 0.32 in the same period of last year.

9. Total Shareholders’ Equity was SAR 456.4 million at 30 June 2019 compared to SAR 426.1 million as at 31 December 2018, an increase of 7.1%.

The company continues to focus on a top execution of the following strategic initiatives:

1. Revitalize our wholesale business through the launch of new premium collections and celebrity based promotions;

2. Expand the newly acquired TOUS franchisee business in KSA;

3. Develop our profitable L’azurde retail business in Egypt;

4. Improve manufacturing productivity by reducing costs, leveraging technology and 3D printing capabilities;

5. Improve the profitability of the L’azurde retail business in KSA by rationalizing our footprint, re-invigorating our flagship shops, leveraging our exclusive airports retail operations and staff training;

6. Reduce working capital through improved collections, manufacturing efficiencies and accelerated reduction of old stocks; and

7. Pursue our M&A strategy by identifying attractive targets where we can add value, grow our profits and offer attractive return to our shareholders.

Considering the above initiatives, and the underlying fundamentals supporting the jewelry industry in the long term, we believe that the L’azurde Group is in a strong position to deliver its longer term growth ambitions.

For more information, we would like to draw the attention of the shareholders that the Consolidated Financial Statements for the second quarter ended 30 June 2019 and earnings presentation will be available on Company’s website (http://www.lazurde.com) under investors’ relations section.