Tomei cautious, cites labour costs and external factors

Gold and jewellery group to provide better in-store and after-sales service and go into creative marketing to attract customers

PETALING JAYA: Tomei Consolidated Bhd remains cautious of gold and jewellery sales for the financial year 2022 due to uncertainties including the geopolitical conflict in Ukraine and labour costs in Malaysia.

Managing director Datuk Ng Yih Pyng said “We are still cautious because of the staff cost, foreign labour cost and external factors like the war in Ukraine and the US dollar performance.”

Additionally, the weaker ringgit will likely increase the prices of gold and jewellery products, he told the media at a press conference after Tomei’s AGM yesterday.

“When the US Federal Reserve increased the interest rate, the gold price in dollars had weakened slightly but it is compensated by the depreciation of the ringgit,” Ng said.

On pricing, Ng said the potential higher cost of procuring the precious metal will be passed on to consumers.

“If the cost goes up, then we will increase the price. It works the other way as well,” he said.

To improve profitability, Ng also said the group needs to provide better in-store and after-sales service and go into creative marketing to attract customers to ensure that Tomei continues to be their choice.

Tomei has to come out with more fashionable and unique jewellery designs while improving their quality for customer satisfaction as all jewellers sell similar products, he said.

According to Ng, currently, Tomei operates 57 stores nationwide and it is looking to open more stores this year.

“We try not to open stores where we already have a presence, so we are now expanding into places that we don’t have a store like the East

Coast. If you open one or two more stores in Kuala Lumpur City Centre, it’s potentially for the same customers,” said Ng.

He also confirmed that Tomei’s precious metals arm YXPM is due to be listed on Bursa Malaysia by end of June.

“We have secured all the necessary approvals and we are going to launch the prospectus soon. Hopefully, after the listing of YXPM, the manufacturing and distribution of business will expand further.”

The managing director also said he expects positive market sentiment with the transition to endemic which means more restrictions and standard operating procedures on businesses have been lifted as well as the influx of Indonesian and Singapore tourists in Malaysian shopping malls after the reopening of the country’s borders.

The integrated gold jewellery manufacturer and retailer posted a 14.6% increase in net profit to RM15.8 million from RM13.8 million for its first quarter ended March 31, 2022 on the back of higher profit margins in line with the increase in gold price.

At the AGM, the shareholders approved the first and final dividend of three sen per share in respect to the financial year ended Dec 31, 2021 which will be paid on June 9, 2022.