PERTH: Lower market demand and the devaluation of Australia's dollar has been blamed for Atlas South Sea Pearl's $0.5 million loss for fiscal 2008.
The Subiaco-headquartered company earned an unaudited profit of $3.9 million before currency losses, interest and tax. Lower demand over the year had reduced prices by up to 50 per cent on some pearl varieties and loose pearls sales were 25 per cent lower than forecast at $11.8 million.
In a statement to shareholders, chairman George Snow said Australia's falling dollar had further impacted earnings.
The company will record realised foreign exchange losses of around $2.76 million and unrealised losses of around $1.99 million. The company is exposed to the Japanese Yen through its bank loan and foreign exchange hedging contracts.
Snow said he was confident difficult economic conditions would create significant opportunities in the long-term, with restructuring currently taking place across the sector.
"Plans have been implemented to preserve cash reserves and strengthen the company's long term future. The pearl farm operations have achieved improvements in quality and productivity in calendar 2008 while will continue in 2009."