Rīga, 2012-08-22 08:25 CEST (GLOBE NEWSWIRE) --
Management report
Type of activity
Goldinvest Asset Management AS (the Company) is primarily engaged in the transactions of investment gold, silver, platinum and palladium, trade with collector’s accessories, precious metals expert and storage services as well as transactions with precious metal-containing materials, their recycle processing, based on Latvian and international law.
Company's activities during the accounting year
The company continues to operate with a focus on two activities — trading of investment gold and recycling of precious metal-containing scrap.
In the 1st half of 2012, the Company's turnover amounted to LVL 3.42 million, an increase of 66% over the same period a year ago, when sales were LVL 2.06 million. Although there was a significant increase in gross profit - from LVL 70.99 thousand in 6 months of 2011 to LVL 208.15 thousand in the 1st half of this year, net profit decreased in the 1st half of 2012 and was only LVL 5.69 thousand, as opposed to 22.37 thousand a year ago. The reason for a decrease in profits was a substantial increase in cost of sales. Company's assets during the reporting period increased by 19% from LVL 1.68 million to LVL 2.00 million.
Compared to the performance of the previous year, the sales of investment gold fell during the first half of this year, which is due to the decrease of demand. The recycling of precious metal-containing scrap has slightly increased.
Financial risk management
The Company may be affected by several financial risks, including credit risk, foreign currency exchange rate, fluctuation risk of precious metal prices and interest rates. The Company management carries out measures to minimize the potential adverse impact of the financial risks on the financial performance of the Company. Risk factors to the Company are the inability to make long-term forecasts on sales amounts of goods and services, price fluctuations of precious metals in global markets, fluctuations of currency exchange rate, especially of LVL/USD, LVL/EUR, USD/EUR, and quality of purchased scrap metals containing precious metals. Also, limiting regulatory enactments of different countries for circulation of precious metals.
The financial resources, which may have an adverse impact on concentration level of credit risk are principally cash and trade receivables. The Company has implemented and follows a credit policy, namely, it sells services on credit only to clients with good credit history, not exceeding the credit ceiling set for each client. The trade receivables are stated at their recoverable value. The Company's partners in financial transactions are local financial institutions with appropriate credit history.
The Company's performance is directly dependent on the sales volume and prices of the Company's traded goods and services. Decrease in sales volumes or prices would bring about deterioration in the Company's financial situation.
One of the main risks is influence of macroeconomic processes on the Company, as a result of which expenses of offered goods and services may increase. Also, cycle of macroeconomics in Latvia and the world may notably affect operation of the Company.
About JSC “Goldinvest Asset Management”:
“Goldinvest Asset Management” was founded in 1997 and its key business areas include purchase, processing and sales of household and industrial precious metals, as well as purchase and sales of precious investment metals (gold, palladium, platinum, silver, etc.). The company grants also loans against precious metal pledge. The company has established an affiliated company in Russia, a branch in Lithuania, and it owns shares of JSC “VEF” and “VEF Komunikaciju Serviss”. Shares of the company are listed on the alternative market First North of the stock market NASDAQ OMX Riga. See more information about JSC “Goldinvest Asset Management”: http://www.latgold.lv/
More information:
Mr Arnis Linde
Project Manager
JSC “Goldinvest Asset Management”
Phone: +371 22050691
E-mail: arnis.linde@latgold.lv
Certified adviser:
Mr Girts Apsitis
Chairman of the board
“Ardente” Ltd
Phone: +371 29466577
E-mail: ardente@ardente.lv
