The following factors mainly explain the changes in group revenues this year:

1. Group total revenues, including gold metal value, were SAR 1,917.0 million in 2023, a decrease of 4.1% compared to SAR 1,999.6 million in the last year. It is worth noting that the Group does not make profits or losses from the value of the sold gold as a metal.

2. Group operating revenues, which better represent revenues of the Group after excluding gold metal value, amounted to SAR 471.6 million in 2023, a decrease of 9.1% compared to SAR 518.7 million in the last year mainly due to the translation of revenues of Egypt at a lower exchange rate.

In KSA, wholesale operating revenues were 3.6% higher than the last year due to strong sales of L’azurde gold in traditional gold souks.

In KSA, retail operating revenues were 4.8% higher than last year due to growth in like-for-like sales of the existing stores and extension of the stores network by opening seven new stores in top locations.

In Egypt, wholesale operating revenues increased by 28% in Egyptian Pound (EGP) terms but declined by 23% when translated to SAR due to the devaluation of EGP, compared to the same period of last year. The company continues to increase its sales prices in Egypt gradually to cope with the EGP devaluation.

In Egypt, retail operating revenues grew by 40% in EGP terms, supported by 33% growth in like-for-like sales of the existing stores and extension of the stores network by opening 4 new stores in top locations. However, due to impact of devaluation of EGP, Egypt retail operating revenues were lower by 13.2% compared to the last year when translated to SAR.

1. Group gross profit of SAR 299.9 million in 2023 was 8.3% lower than last year of SAR 327.0 million due to lower operating revenues because of the devaluation in EGP, which is expected to be compensated as we continue increasing prices in EGP.

2. Group operating expenses of SAR 216.8 million were 10.2% lower than last year of SAR 241.4 million due to cost control initiatives and positive effects of EGP devaluation.

3. Group operating profit of SAR 83.1 million for 2023 was slightly lower by 2.9%, when compared to SAR 85.6 million in the last year due to the reasons mentioned above.

4. Net profit in 2023 amounted to SAR 30.8 million compared to SAR 34.2 million in the last year, a decrease of 9.9%.

5. The Comprehensive loss attributable to shareholders of the Company for 2023 amounted to SAR 10.8 million compared to SAR 49.0 million last year.

6. Basic Earnings per Share (“EPS”) was SAR 0.54 in 2023 compared to SAR 0.59 in the last year.

7. Total Shareholders’ Equity on 31 December 2023 was SAR 360.5 million compared to SAR 389.5 million on 31 December 2022, a decrease of 7.4%, due to payment of dividends, and a negative movement in the Currency Translation Reserve due to unrealized foreign exchange differences on investment in Egypt. It is worth mentioning that the Currency Translation Reserve is a non-cash item that arises on consolidation only and fluctuates with the fluctuation of the foreign exchange rates.

The Company successfully pursued its turnaround plan in 2021-2023 and delivered robust results consistently quarter after quarter. Looking ahead, the Company will continue the major innovations undertaken over the last two years and introduce new upcoming growth drivers. We continuously search for and identify innovations and new initiatives to grow our topline, improve our gross margin and operate with a lower working capital. We offer a diversified portfolio of brands including L’azurde, TOUS and Miss L’ while we consolidate our offering to adapt and win in times of changing consumers’ shopping behaviors. We are also mitigating the short-term downsides of the EGP devaluation by increasing our sales prices in EGP, and by launching new products offering great value to consumers and providing us strong margins.

The strategic drivers for the future success of the Company consist of:

1. Expanding the fast-growing Miss L’ fashion jewelry line to its full potential through our own retail points of sales, e-commerce, and 3rd party retailers.

2. Growing our successful L’azurde retail business through new points of sales and a stronger assortment. Especially in KSA, we have a great opportunity to increase the current network of L’azurde retail to a much larger and profitable network, leveraging the very strong brand awareness and 40-year-old legacy. The Company has been successful in finding several promising new retail locations where stores will be opened soon.

3. Accelerate development of the wholesale business selling jewelry by weight, through a revitalized collections assortment, more profitable products mix, marketing support and lower working capital.

4. Leveraging our solid customers’ network in the traditional gold jewelry market to expand product lines, drive new collections distribution, thereby improving revenues and profits.

5. Scaling our fast-growing e-commerce business through more investments in technology, infrastructure, systems and building a state-of-the-art and experienced digital organization.

6. Expanding the TOUS global franchise business in KSA through stronger assortment, new stores, and more investments in marketing.

7. Developing new material growth initiatives across the GCC to leverage the Company’s capabilities and diversify the revenues and profits outside Egypt.

8. Growing our cash position while continuing to generate positive cash flows and reinforcing our solid banking relationships to support the Company’s transformation initiatives.

For more information, we would like to draw the attention of the shareholders that the Consolidated Financial Statements for the year ended 31 December 2023 will be available on Company’s website (http://www.lazurde.com) under investors’ relations section.