From the ann: "Atlas Pearls and Perfumes Ltd (ASX: ATP) (“Atlas”) achieved strong results at its last pearl auction held in Kobe on March 18--‐19 with 16 successful bidders, at an average of 6.6% over reserve prices and total sales hitting over AUD1.326m."
This compares with $1.3m for Dec 8-9, 2014, $1.4m for Oct 22-23, 2014, $2.5m for June 26, 2014, and $1.4m for December 4-5, 2013.
I can't see a March 2014 auction for direct comparison, but if we can assume the June 2014 auction was for 6 months worth of stock, these results seem to compare well with last year. Of course the results are reported in AUD so that will disguise a fall in USD revenues, assuming that is the denomination of the auction.
Production operations are mainly outside Australia, so the weak AUD doesn't help with those. Head office expenses will be denominated in AUD, as, I presume, will debt servicing costs. There is nothing in the balance sheet or profit and loss statement to indicate borrowings are not denominated in AUD. So the weak AUD will help with HO overhead and debt servicing, but not have much impact on gross margins.
It might therefore be interesting to have those auction results reported in USD as well as AUD.
For comparative purposes, from xe.com, the AUD/USD rates for the auction dates were 0.77 for Mar 19 2015, 0.83 for Dec 9, 2014, 0.88 for Oct 23, 2014, 0.94 for June 26, 2014, and 0.90 for Dec 4, 2013. So according to my back of envelope calculations, the USD revenues were: $1.0m for Mar 18-19, 2015, $1.1m for Dec 8-9, 2014, $1.2m for Oct 22-23, 2014, $2.4m for June 26, 2014, and $1.3m for December 4-5, 2013.
So there is a downward trend, with something in the order of a 25% decline over 15 months, which with a 15% drop in volume and a further 15% drop in unit sales prices from the reduced pearl size, seems to conform reasonably with the announcements made.
We just have to hope that an increase in pearl size in 2016 also takes place, as predicted by the announcements.
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