On behalf of the Board of Directors, I am pleased to present the Annual Report of DeGem Berhad ("the Group") for the financial year ended 31 December 2010.
Financial Performance
For the financial year 2010 under review, the Group registered a revenue of RM185.253 million compared to RM188.960 million for the financial year 2009. Despite the lower revenue, the Group chalked up a higher gross profit of RM67.467 million against RM64.493 million for the previous financial year.
However, profit before taxation was 5% lower at RM21.039 million due to higher startup operation expenses. Earnings per share for the period under review stand at 10.67 sen.
As at 31 December 2010, the Group shareholders’ fund had grown by RM9.91 million to RM154.661 million while net asset per share rise to RM1.19. Total debt to equity ratio improved to 0.16 times from 0.23 times as at end of 31 December 2009.
Review of Operations
Overall, the Group’s result for the year remained fairly consistent, with a 2% drop in revenue compared to the revenue in the financial year 2009.
The Group’s overseas ventures recorded an 8% increase in revenue compared to the previous financial year, while revenue from domestic operations dipped by about 4%.
During the financial year 2010, the Group expanded its domestic retail operations with the opening of a new Diamond & Platinum outlet in Kuching in December 2010. The year 2010 also heralded the opening of a new DeGem showroom in August at the Marina Bay Sands in Singapore, as part of the Group's regional expansion efforts.
Dividend
The Board of Directors recommends a first and final gross dividend of 6% (3.0 sen per share) less 25% taxation, subject to the approval of the shareholders at the fourteenth Annual General Meeting.
Prospect
Prices of diamond, gemstone and precious metals have been rising steadily for the last few years. However, the higher prices are sustained by strong demand from the newly developed markets of China, India, Middle East and South America.
The rising and firmer price of jewellery will further confirm that jewellery is a store value of wealth that will appreciate over time.
Barring unforeseen circumstances, the Group expects to achieve a satisfactory result for the coming year 2011.
Acknowledgement
On behalf of the Board, I would like to extend my heartfelt gratitude to our shareholders, bankers, customers, business partners and regulatory authorities for their continued support, guidance and assistance extended to the Group. The Board would like to express its appreciation to the management and employee of the Group for their hard work and dedication.
Dato' Hasan bin M. Taib
Chairman