Damas International announces H1 2008 results

Financial Highlights - a strong performance across Damas' business lines:

• The group's revenue grew by 33.7% to Dhs2.4bn (H1 2007: Dhs1.8bn) in spite of high gold prices.
• Damas concentrated on maximizing the sales on core jewellery business which consists of gold jewellery, diamond jewellery, pearl jewellery and watches, and managed to reduce the bullion sales considerably (H1 2008: Dhs33.4bn, H1 2007: Dhs209.7bn).
• Gross profits rose by 71.4% to Dhs456.7m (H1 2007: Dhs266.5m) and the gross margins increased to 19.1% (H1 2007: 14.9%).
• EBITDA increase by 181.1% to Dhs204.5m (H1 2007: Dhs72.8m).
• Adjusted EBITDA has increased by 137.5% to 235.9m (H1 2007: 99.3m).
• Net profits jumped by 132.9% to Dhs164.8m (H1 2007: Dhs70.8m).
• Completion of IPO raising $270.6m on July 8, 2008.

Operational Highlights - continuing geographical expansion and manufacturing capabilities

• Opened a total of 42 new stores to bring the total as at June 2008 to 467.

- 11 new stores in the UAE, including the first-stand alone Parmigiani and Links of London Boutiques
- 14 new stores in the GCC other than the UAE
- 17 new stores outside the GCC

• UAE stores remain major contributor to revenue amongst other markets.
• Launched 14 new jewellery collections of its own and international brands.
• Launched the Damas Cut, a unique 77-facet premium diamond cut with an exclusive jewellery collection.
• Partnered with IDL to issue authentication certificates to diamond jewellery in English or Arabic. IDL usually certifies loose diamonds.
• Won Mohammed bin Rashid Al Maktoum (MRM) Award in Re-Export Category
• Awarded the Best Service Performance Brand in Special Business Category by Dubai Service Excellence Scheme etc.

Outlook - Use of IPO proceeds to expand organically and through strategic acquisitions

• Damas plans to open around 80 plus shops by end of 2008 to bring the total to 131 new stores opened this year and to 569 Damas stores around the world.

- More than 50 new stores in the UAE alone.
- More stores in Saudi and Egypt.

• Plans to use up to 40% of IPO funds for expansion and acquisitions.
• Plans a 50% output capacity hike at a gold factory it owns jointly with Emaar Industries and Investments by end 2009.

Commenting on the results, Mr Tawhid Abdullah, Chief Executive Officer and Managing Director, Damas, said:

"This is our first set of results as a public company and I am delighted to report that we have seen strong growth across the business. This was driven by solid like for like sales, increased market share and strong operational efficiencies. We have launched a range of exciting products and brands including our 'Damas Cut' diamond which has had excellent reviews and is already seeing very positive consumer interest."

He added: "Market conditions in our core markets remain good and we are confident that we will be able to deliver a strong performance for the remainder of this year and into 2009."

PK Dutta, Chief Financial Offer, Damas, commented:

"We are proud to report these results which surpassed expectations and are excited about the potential to strengthen our position further in the current year as we sustain momentum and continue to grow our presence in established and new markets. Damas is well placed to look at opportunities and make selective acquisitions to accelerate its expansion while concentrating on maximising shareholder value."