Blue Diamonds: A Glimmer of Hope or Just a Polished Stone? Sales Up, But Losses Linger, and Trading is Halted!
A jewellery company's interim financial dance
๐ Key Numbers in Human Terms
Let's break down how Blue Diamonds has been doing, looking at the nine months up to December 2024 compared to the same period last year.
| Metric | This Period (9 Months Ended Dec 2024) | Last Period (9 Months Ended Dec 2023) | What Changed (Good, Bad, or Steady) |
|---|---|---|---|
| Revenue | Rs. 23.65 Million | Rs. 16.44 Million | +43.8% Good! ๐ |
| Net Loss | Rs. 24.73 Million | Rs. 73.76 Million | Loss significantly reduced! โ |
| Cash in Hand | Rs. 0.62 Million | Rs. 37.85 Million | -98.4% Bad! ๐ป |
| Current Loans (Short-Term Debt) | Rs. 47.82 Million | Rs. 26.51 Million | +80.4% Bad! โ ๏ธ |
| Inventories (Stock) | Rs. 69.12 Million | Rs. 98.15 Million | -29.6% Good! ๐ |
| Total Equity | Rs. 89.83 Million | Rs. 173.85 Million | -48.4% Bad! ๐ป |
A Crucial Point for Investors: Their shares are currently suspended from trading on the Colombo Stock Exchange since December 10, 2024 (Report p.9). This means you cannot buy or sell BDJW shares on the market right now.
๐ What's Pushing Forward
- ๐Revenue Revival: Despite challenges, sales increased significantly, showing demand for products.
- ๐ฉนSlowing the Bleeding (Reduced Losses): Dramatic reduction in net loss indicates cost management is bearing fruit.
- ๐New Horizons?: Actively pursuing new buyers and anticipate potential revenue increase, indicating proactive expansion efforts.
โ ๏ธ Potential Pitfalls
- ๐Share Trading Suspension (Major Concern): Investors cannot easily sell shares, making the investment illiquid. Signals potential compliance or other significant issues.
- ๐ธPersistent Losses and Eroding Equity: Still losing money, leading to accumulated losses and significant drop in net worth, questioning long-term sustainability.
- ๐Cash Flow and Debt Strain: Dramatic drop in cash and increased short-term debt indicates a very tight cash situation, potentially impacting day-to-day operations.
๐ฏ Future Performance Scenarios (12-18 months)
Important Note: These scenarios assume that the share trading suspension is lifted. If the suspension continues indefinitely, the share price effectively remains at zero for practical trading purposes.
๐ญ Colombo Stock Whisperer's Bottom Line
Blue Diamonds Jewellery has shown some encouraging signs in its operations, with strong revenue growth and a much smaller loss. This indicates they are trying hard to turn things around in a tough market. However, the significantly reduced cash, increased short-term debt, and โ most critically โ the ongoing share trading suspension are flashing bright red lights.
For small investors, the suspension is the dominant factor. Until trading resumes, your shares are illiquid. Even if trading resumes, the company faces an uphill battle to return to sustainable profitability and rebuild its equity. This is a very high-risk situation, akin to waiting for mal pooja (flower offering) in the rain โ hope is there, but so is uncertainty. As always, โเถดเทโเถปเทเทเทเถธเท เทเถฑเทเถฑ!โ (Be careful!) and do your own thorough research.