Damas International, the Middle East's largest jeweller, is back in the black after a tumultuous two years during which three former executives brought the company to the brink of financial ruin.
The company announced a profit of Dh53 million (US$14.4m) for the year ending March 31, compared with a loss of almost Dh2 billion for the previous year.
Ibrahim Belselah, the chairman of Damas, said the year had been one of the most eventful in the company's 104-year history and that a host of reforms had been introduced to ensure future financial stability.
"Combined efforts have enabled Damas to achieve these robust results," said Mr Belselah. "The highlight of our performance was the achievement of successful financial restructuring."
A Dh3 billion deal was signed in May with more than 20 banks to give the company the necessary working capital and loans to consolidate the business and expand further into Saudi Arabia. An agreement was also signed with the Abdullah brothers, Tawhid, Tawfique and Tamjid, former executives of the company, to repay Dh1.8bn of cash owed to banks and creditors, and Dh600m still owed to Damas International.
The brothers were the subject of the strictest disciplinary action in the history of the Dubai International Financial Centre in March last year for improperly withdrawing Dh365m of cash and almost two tonnes of gold worth Dh250m from Damas without shareholder approval.
"The management focus of the past financial year has been on stabilising the business, and a lot of progressive reforms were implemented to this effect," said Anan Fakhreddin, the chief executive of Damas. "These initiatives have enabled the company to consolidate its market share and achieve Dh2.95bn in sales this period."
Although sales fell 10 per cent compared with the previous financial year, the company increased margins by overhauling its business, cutting staff and reducing advertising and marketing spending.
Damas closed more than 100 stores and withdrew from a number of markets it deemed non-core.
Its joint venture in India, the world's biggest jewellery market, is being reconsidered and Saudi Arabia is now the group's core focus.
"Saudi Arabia as a market holds a lot of promise and efforts are under way to build a strong platform for long-term growth in that market," said Mr Fahkreddin.
The past financial year had been a challenging period characterised by tough competition and increasing commodity prices, he said, with gold hitting a record high last week.
In response to the crisis of the past two years, a number of codes, processes and policies have been introduced by Damas, designed to enhance transparency and best practice, including the creation of five new board committees.
The Abdullah brothers have been kept on as advisers in the past year to help recover money from business deals, many of which were sealed with only a handshake.
The repayment agreement with the Abdullah brothers will last three years so creditors might receive the maximum level of debt owed to them.
Currently, much of the brothers' wealth is tied up in property and investments creditors hope will eventually increase in value.
Damas said in May that given current market valuations of the brothers' assets, it would receive about a third of the money it was owed if the assets were liquidated now.