Jeweller sees gold price on 'the uptrend'
KUALA LUMPUR: Poh Kong Holdings Bhd expects the price of gold to hold up this year as demand stays resilient, said its head of corporate affairs, administration and human resources Margaret Hon.
“The gold price will look choppy in 2012. It is lower now, but moving forward, we foresee it will be on the uptrend.
“Last year, we predicted gold would rise to US$2,000 per ounce, but it peaked at US$1,900 per ounce on Sept 5,” Hon said after the company's AGM.
Executive chairman and group managing director Datuk Choon Yee Seiong said a crucial factor that could influence gold prices was whether the conflict in Iran escalated, which could push up prices by some 30%.
Iran has threatened to shut down shipping lines on the Strait of Hormuz, a key route for oil, in response to Western sanctions on its oil exports.
Gold is seen as a safe haven in times of crisis. Prices shot up to a nominal all-time high in 2011 when global equity markets suffered a rout at the height of the eurozone debt crisis.
As at 6pm yesterday, spot gold was up 0.82% to US$1,624.4 an ounce.
Hon said even though gold prices were at record highs last year, it did not discourage demand from investors.
“Demand for gold globally is still on an upward trend. There is potential for us to perform,” she said.
Asked how Poh Kong mitigated the surge in gold prices on its bottom line, Hon explained that its margins depended more on its stock holdings.
“If we have gold stocks at a lower cost, we can enjoy higher margins until the stocks regularise themselves,” she said.
The company's inventory of gold, diamonds and gemstones increased to RM443.7mil in the financial year ended July 31, 2011 versus RM383.6mil a year earlier.
Choon said the jeweller, which would open its 101st store in Ipoh's Aeon Station 18 shopping centre in March, had ruled out overseas ventures this year.
On the progress of the group-wide restructuring, she said Poh Kong would wind up its non-key subsidiaries and consolidate all retail outlets under Poh Kong Jewellers Sdn Bhd.
In 2011, the company proposed to take up Islamic debt papers totalling RM150mil, with RM50mil to be spent on new branches and manufacturing equipment and RM100mil for the restructuring.
Hon said the restructuring, which could take three to five years, would bring down the costs of its subsidiaries, but declined to put a number on the expected savings as it has just commenced.
For its first quarter ended Oct 31, 2011, revenue climbed 36.11% to RM230.65mil from RM169.45 previously, while net profit rose 62.82% to RM17.72mil from RM10.89mil, bolstered by higher gold prices and sales.
Poh Kong ended unchanged at 44.5 sen with 597,500 shares changing hands.
Source : The Star
Date : 11 January 2012
Today’s Pick (11/01/12/007/697)
No comments:
Post a Comment