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A-Mark Precious Metals Inc

A-Mark Precious Metals swings to fiscal 4Q net loss due to sluggish precious metals market

Silver was not in vogue in the quarter as A-Mark's sales of the precious metal slumped 39% from the year-ago quarter to 8.6mln ounces

Gold bullion
A-Mark CEO said 'unprecedented low levels of activity' continue to persist in the precious metals market

A-Mark Precious Metals (NASDAQ:AMRK), the precious metals trading company, swung to a net loss in its fiscal fourth quarter due to higher expenses and sluggish levels of activity in the precious metals market.

For the three months ended June 30, the El Segundo, California-based company’s net loss came to US$3mln or a loss of US$0.43 per diluted share, as compared to net income of US$1.2mln or US$0.17 per share in the same period a year ago.

Its revenue, meanwhile, climbed 33% to US$1.77bn from US$1.33bn in the year-ago quarter.

Gold sales proved popular in the quarter, jumping 98% to 586,000 ounces from 296,000 ounces last year. Silver, meanwhile, was not in vogue as sales of the precious metal slumped 39% from the year-ago quarter to 8.6mln ounces from 14.1mln ounces.

Costs cut into profits too, as A-Mark's selling, general and administrative expenses jumped 38% to US$7.7mln from US$5.6mln in the year-ago quarter.

CEO Greg Roberts noted that the company is looking to rachet up its market share with the introduction of a 24/7 trading portal as well as the development of new bullion products through its ties to sovereign mints.

“Despite the unprecedented low levels of activity that continue to persist in the market, we further diversified our business model to create additional and more predictable sources of income in an effort to enhance our capabilities and profitability when conditions improve,” said A-Mark CEO Greg Roberts.

Looking ahead to the current quarter, Roberts said a decrease in silver and gold prices is producing volatility and generating “modest, incremental demand” for A-Mark’s physical products.

A-Mark’s portfolio of secured loans also soared by 48% to 3,507 at the close of June from 2,375 in the year-ago quarter. “This segment of our business grew meaningfully in 2018,” noted Roberts.

Founded in 1965, A-Mark Precious Metals is a precious metals trading company and wholesaler of gold, silver, platinum and palladium. The company’s customers include sovereign and private mints as well as dealers, investors and collectors.

A-Mark shares closed down 1.23% to finish at US$13.63 on Tuesday.

Quick facts: A-Mark Precious Metals Inc

Price: $11.50

Market: NASDAQ
Market Cap: $80.86 m
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