Mennica Skarbowa, a New Connect-listed company and Poland’s largest dealer of investment gold and other precious metals, closed the full year of 2022 with its highest-ever sales level. The company generated revenues of PLN 1.22 billion, compared to PLN 1.07 billion in 2021, which represents an increase of more than 10%. Net profit reached PLN 21.5 million, compared to PLN 21.7 million in 2021. Meanwhile, it is worth noting that the company increased its operating profit from 2021’s 29.78.7 million to 32.85 million last year. According to the company’s management board, demand for gold will continue to remain high in Poland, and the price of the commodity will rise as a result of political uncertainty in Europe, turmoil in the global banking market and the continuing high inflation rate. Therefore, Mennica Skarbowa is planning dynamic development as a result of, among other things, the expansion of its stationary sales network, as well as new investments related to e-commerce and promotion of its own brand.
In all of 2022, Mennica Skarbowa sold nearly 5 tons of gold, compared to 4.53 tons of gold in 2021. Last year, Poles were most likely to buy small-weight gold, which is easily sold around the world or exchanged for other everyday goods. In 2022, customers intensively bought 1g and 100g gold bars, as well as ounce bullion coins. The most popular gold coin in the world, the Canadian Maple Leaf and the Australian Kangaroo were particularly popular among buyers. Mennica Skarbowa recorded a 20% increase in sales of these products compared to 2021. The company also saw increasing sales through online channels.
– Once again, we recorded a record in annual sales and maintained our position as market leader. Poles are increasingly willing to buy investment gold products, treating it as a safe form of saving for years to come. Last year, Poland set another record for gold sales. We estimate that customers bought a total of about 19 tons of gold bullion products, placing our country in the Top 5 in Europe in terms of sales volume. Demand for gold is bound to grow in the medium term. The war in Ukraine, pervasive inflation around the world and the recent turmoil in the global banking market will reinforce this trend. For this reason, this industry is becoming increasingly competitive, and more and more companies are trying to find a place in this segment of the economy, including well-known jewelry companies as well as mining companies. Therefore, Mennica Skarbowa will be expanding intensively this year. The expansion of the stationary sales network is ahead, as well as investments in e-commerce and promotion of its own brand. This will allow the company to respond to the increasing demand for gold among Poles. After all, I am convinced that also this year Poland will break the record for sales of bullion products and for the first time in history we will break the barrier of 20 tons – says Jarosław Żołędowski, President of the management board of Mennica Skarbowa.
The annual increase in revenue recorded by Mennica Skarbowa was the result of several factors. The first was the global situation. The outbreak of war in Ukraine in early 2022 brought another wave of increased interest in gold, historically considered the most effective hedge of asset value in times of war, after the COVID 19 pandemic. In addition, rising inflation, which always increases investors’ interest in placing capital in a stable and highly mobile investment such as precious metals, as well as fears of recession, were also significant. On the other hand, the tightening of monetary policy, radical interest rate hikes by central banks, the increase in the investment attractiveness of bank deposits and treasury bonds, and the rapidly strengthening dollar caused an exodus of some investors, which slowed demand growth. The company’s expanding sales network was an important factor allowing it to take advantage of the relatively favorable market situation. In March 2022, another stationary sales outlet was opened in Bydgoszcz – the sixteenth in Poland and the first in the Kujawsko-Pomorskie Voivodeship. A second, important factor related to the above, which contributed to the high sales performance, was the wide range of products available “off-the-shelf” directly at the sixteen branches, which was an important competitive advantage.
In the fourth quarter of 2022 alone, the company’s sales revenues amounted to PLN 343.9 million, while in the comparable period of 2021 revenues amounted to PLN 457.2 million. Gross margin on sales of goods and materials amounted to PLN 9.5 million in Q4 2022, down 10.4 million year-on-year in the comparable period of 2021, while the percentage margin was 2.8% and 4.4%, respectively. The lower gross margin on sales of goods and materials was a result of higher purchase prices of goods and aggressive pricing policies of competitors, which affected lower selling prices. In addition, in order to maintain its leading position in the market for the sale of investment gold, the company incurred higher marketing and promotional costs in Q4 2022, as well as activities to make its sales channels more attractive, including the revitalization of the sales outlet in Warsaw at 1 Jasna Street, and costs related to the opening of a new branch in Bydgoszcz. It is worth noting that marketing costs were also associated with the promotion of the online channel, which is still being developed by the company. The above led to a gross loss in Q4 2022 alone in the amount of PLN 80,000. Nevertheless, in the opinion of the company’s management board, the above investments will bring tangible economic benefits to the company and will allow Mennica Skarbowa to strengthen its position as a market leader.